Yearn.finance (YFI), a leading decentralized finance protocol, has accelerated the rollout of its v2 vaults.
While Yearn.finance is a DeFi ecosystem, it is currently best known for its Vaults product. Vaults are contracts where users can deposit cryptocurrencies like Ethereum, USDC, YFI, and others for a regular return paid on the coin they deposited. Vaults allow cryptocurrency holders to generate passive income from their holdings. The v2 iteration of these vaults is expected to increase ROI and, as a result, bring more capital for YFI owners and more value for the entire Yearn ecosystem.
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YFI may see new safes soon
Yearn.finance (YFI) v2 safes have long been rumored. Details about them have been a little scarce, but are expected to bring more returns to Vault depositors through more advanced smart contracts and moving parts to increase capital efficiency.
Project founder Andre Cronje recently shared the following tweet, apparently highlighting the potential returns for new v2 Vault strategies.
As can be seen, the returns on offer are much higher than traditional financing and a fair bit higher than most DeFi applications.
For example, the USDC v2 Vault has an APY of 55.7%, which is several orders of magnitude higher than what is offered in the traditional finance industry today.
v2. @ bantg pic.twitter.com/apKthQacmj
– Andre Cronje (@AndreCronjeTech), January 13, 2021
Returns are expected to increase YFI’s value proposition as it puts more capital into these vaults, increasing the dividends that YFI stakers earn.
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The returns offered on Yearn.finance Vaults (and the dividends accrued from expanding to YFI) 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 safes become lever safes and cross-asset strategies can be implemented. Deposit of 1k DAI can deposit 1k DAI and 1k USDC in Alpha Curve or 1k DAI and 1k ETH in Alpha Sushiswap, which were loaned indirectly through Iron Bank. These cross-platform strategies allow up to 90x leverage on stable coins and 80x leverage on ETH, allowing users to either sell and reassemble or accumulate the asset. The more collateral that is brought into the Iron Bank and the Alpha v2 return becomes agnostic. “
YFI is up a few percent from 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