The protocol focuses on maintaining a high degree of decentralization and censorship resistance. Uniswap is an Ethereum-based decentralized exchange that enables users to swap ERC20 tokens without the need for buyers and sellers to create demand. In cases where there is not enough capital in the protocol to cover lenders’ funds, the AAVE in the Safety Module will be sold for the assets needed to cover the deficit.
Additionally, AAVE introduced a new concept called “Safety Module” that protects the system from a shortage of capital. Another exciting feature of Aave is flash loans that allow users to borrow without collateral, as long as they repay the loan amount by the time the next block is mined.ĪAVE is the native governance token of the Aave protocol, which enables cryptocurrency holders to discuss and vote on proposals that affect the project. Unlike other lending protocols, Aave allows users to choose and switch between a variable and stable interest rate to ensure receiving the optimal rate based on the pool. AAVEĪave is an open-source and non-custodial liquidity protocol that enables users to lend and borrow cryptocurrencies in a trustless manner, thus earning interest on deposits and borrowing assets. We are proud to support token holders with our institutional-grade custody and further asset management services while also contributing to the innovative momentum of DeFi. With the equivalent of over 27.8B USD in locked value at the time of writing, these six tokens showcase a clear and increasing demand for true decentralization and services, previously only offered by centralized providers. We are excited to introduce support for Aave (AAVE), Uniswap (UNI), The Graph (GRT), SushiSwap (SUSHI), Compound (COMP), and Yearn Finance (YFI). Instead there are reinforcing flywheel effects where tokenomics rewards drive more TVL, that in turn drive more fees, that in turn drive more YFI buybacks, that is then used to reinforce the tokenomics.Institutional investors looking to diversify their portfolios can now custody six additional top DeFi tokens with Finoa. The authors of the newly passed proposal argued, “The new design does not create a drain on Treasury assets. The proposal leaves the timeline for implementation up to Yearn’s development team and builds on January’s Buyback And Build Yearn (BABY) proposal ( Yearn Improvement Proposal-56). The authors estimate that $30 to $35M worth of YFI will be distributed annually to users who stake their tokens. In 2021, Yearn has been able to buy roughly 300 YFI with profits, according to the authors of the newly passed Yearn Improvement Proposal. YFI remains around $8,000 behind the price of BTC. “The spot market is just so thin and buybacks + locking haven’t even started yet.” And it’ll certainly see $100k before BTC does,” Cinneamhain Ventures’ partner Adam Cochran tweeted this weekend.
“At this pace 1 $YFI will be more than 1 $BTC any day now. Decentralized finance tokens have struggled to hold value this year even as more and more people use DeFi. Yearn is following the lead of automated market maker Curve Finance, with the revamped tokenomics intended to limit liquid supply and foster long term price appreciation. YFI is trading 35% higher since the vote closed on Dec.
The proposal passed with 99% of YFI voters supporting the change. Yearn will use protocol profits to buy YFI tokens off the open market and distribute it back to stakers, while also maintaining a fixed operational fund of $30M. Once implemented, holders of its YFI governance token will need to stake their tokens to participate in governance, but in doing so they will be able to earn more YFI. Yield aggregator Yearn Finance has closed the vote on its new tokenomics. Yearn has decided to make governance pay.
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