YFI, the native token of decentralized-finance protocol Yearn Finance, has managed to fend off bearish market forces with a 7% increase in the past 24 hours as investors attempt to capitalize on the platform's upcoming rollout of liquid staking derivatives.
The cause for optimism among YFI traders was last week's announcement that Yearn Finance was moving into liquid staking derivatives. Liquid staking derivatives are a type of token that gives investors exposure to an underlying asset while receiving staking rewards as a part of the Ethereum blockchain's proof-of-stake network.
"Get exposure to a basket of LSDs in one token," Yearn Finance said in a tweet. "Spread your risk. [Receive] boosted yields."
Analysts say a basket of LSDs gives active investors exposure to many different underlying tokens so that they can diversify their risk. Thus, the increased interest in Yearn Finance and its token.
YFI was recently trading at $10,770, while bitcoin and ether (ETH) were down 4.4% and 4.6%, respectively, as fear gripped the crypto market following concerns over crypto bank Silvergate Bank's financial stability.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.