Yearn was among the first yield aggregators in the now-mature decentralized-finance ecosystem.
Decentralized-finance (DeFi) project Yearn Finance will allow users to create their own vaults to accrue yield and deposit proceeds to earn even more token rewards.
Yearn will charge 10% as performance fees for providing such a facility. DeFi is a term used to describe financial activities carried out on a blockchain without traditional middlemen.
So far, users have been limited to vaults created by Yearn’s contributors and developers. With the introduction of the “permissionless vault factory,” anyone can create their own strategies and offer them on Yearn, where other interested users can deposit their own tokens and earn yields.
This may, in time, increase Yearn’s user base and attract more liquidity to the popular DeFi tool. Yearn produces revenue based on user liquidity, when it charges a portion of the rewards as fees for its yield-aggregation service.
Vaults refer to an on-chain product that uses crypto deposits to earn yield through various investment strategies. These yields are generated as a “reward” for participation in DeFi applications, such as lending, borrowing, or trading.
Yearn had over $360 million in total value locked as of Tuesday, DefiLlama data shows. More than 24 vaults are already active on the Yearn platform, offering yields ranging from 1.3% to as much as 17% annualized.
As of Tuesday, users can initially make vaults only for the liquidity tokens of Curve Finance, a stablecoin-swapping application. Those vaults will use veCRV, a time-locked token issued by Curve that allows users to effectively boost their yield rewards.
Some $100,000 in fees was generated on Curve in the past 24 hours, data shows, with these fees distributed to Curve users and liquidity providers.
The permissionless vaults are part of a broader V3 plan, which aims to make Yearn wholly decentralized in the future in terms of products and services offered to users.
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.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.