The governance token for yEarn.finance (YFI) has shot up over 32,000% since mid-July as investors have poured hundreds of millions into its protocol, which identifies and exploits some of the best opportunities in the white-hot decentralized finance (DeFi) space. 

  • CoinGecko data shows YFI tokens shot up to nearly $11,250 on Tuesday before giving back some gains: they were just $32 when they started trading on July 18.
  • As the graph below shows, YFI soared past $1,000 the day after launching and was already worth $4,000 by the start of August.
  • Investors have poured hundreds of millions into yEarn since it launched mid-May. On July 18, the protocol had $9.3 million in total value locked; at press time there were over $600 million, according to DeFi Pulse.
  • After a relative lull, the token doubled from $5,500 on Sunday to over $11,000 earlier Tuesday before dropping over $1,500 to $9,800 as this article was going to press.
chart-1-6
YFI price performance over the past seven days.
Source: CoinGecko
  • In yEarn, investors deposit digital assets into the protocol which identifies and executes various DeFi trading strategies, offering ROIs of up to 95% on their holdings – the platform taking 5% of total yield as fees.
  • As a governance token, users can stake YFI in order to determine the overall direction of the protocol along with other token holders.
  • Helping drive demand is the scarcity of the tokens. There are only 30,000 YFI tokens – a $300 million market cap – with the vast majority already circulating in the ecosystem.
  • yEarn founder Andre Cronje told CoinDesk the price rise likely came from a combination of scarcity and the fact traders were using YFI in some of the other DeFi protocols.
  • Many big holders, such as Framework Ventures, are now hoarding YFI tokens for the staking rewards – increasing supply pressures still further, he said.

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