Yearn.finance (YFI), a leading decentralized financing protocol, has kick-started the launch of its v2 Vaults.
While Desire. Finances is an overarching DeFi ecosystem, it is currently best known for its Vaults product. Vaults are contracts where users can deposit cryptocurrencies such as Ethereum, USDC, YFI and others to earn regular returns that are in the mint they deposit. Vaults allow cryptocurrency holders to earn passive income from their holdings. The v2 iteration of these Vaults is expected to increase returns and, as a result, send more capital to YFI holders and more value to the overall Yearn ecosystem.
YFI could see new safes soon
There are already rumors about the (YFI) v2 Vaults from Yearn.finance. Details on them are somewhat sparse, but they are expected to generate more returns for Vault savers through more advanced smart contracts and more moving parts to increase capital efficiency.
Project founder Andre Cronje recently shared the tweet below, which seemingly shows the potential returns of new v2 Vault strategies.
As can be seen, the yields offered are much higher than traditional finance, and also quite a bit higher than most DeFi applications.
For example, the USDC v2 Vault reports an APY of 55.7%, which is a few orders of magnitude higher than what is offered in traditional financial institutions today.
– Andre Cronje (@AndreCronjeTech) January 13, 2021
The proceeds are expected to boost YFI’s value proposition as it will drive more capital into these vaults, increasing the dividends YFI strikers earn.
Cross protocol integrations
The returns offered on Yearn.finance Vaults (and the dividends attributed to YFI by extension) are likely to be increased by cross-protocol integrations.
Cronje commented on these integrations last week:
“With Cream v2 (Iron Bank), Alpha Homora v2 and Yearn v2, all vaults become leveraged vaults and cross asset strategies become viable. Deposit 1k DAI can deposit 1k DAI and 1k USDC in Alpha Curve or 1k DAI and 1 ETH in Alpha Sushi Swap borrowed indirectly through Iron Bank. These cross-platform strategies allow for up to 90x leverage on stable coins and 80x leverage on ETH and allow users to sell and build or accumulate the asset. As more collateral is introduced into Iron Bank and Alpha v2 yield becomes agnostic. “
YFI is up a few percent from the recent announcements and tweets.
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Featured Image from Unsplash Chart from TradingView.com Price Tags: YFIUSD, YFIBTC Yearn.finance Founder Andre Cronje Drops Hints About v2 Vaults