Yearn Finance’s New Safe Aims to Replenish Lost Cash

Yearn’s new safe locks CRV tokens for four years.

Yearn Finance’s liquidity has fallen 63% in the past two months.

The promise of long-term returns can help replenish collateral

Yearn Finance’s latest liquidity farming pool was launched as the DeFi protocol restructures and adds new incentives.

The total value locked in across the DeFi ecosystem is now an all-time high of $ 12.65 billion, but not all protocols benefit from the collateral flow.

Yearn Finance, for example, has lost 63% of its cryptocurrency collateral, which fell from $ 967 million in early September to $ 354 million today according to DeFi Pulse.

Popular safes such as Bitcoin Legacy have proven to be unsustainable, with yields falling from 90% to less than 1%, leading to a cash drain. Today, this vault has been closed to the deposits and only brings in a paltry 1.3%.

Many wishing to opt out will likely have found themselves out of their fund considering the current transaction fees combined with the 0.3% withdrawal fee.

The DeFi protocol has restructured some of its safes, its latest offering being a so-called “backscratcher” safe, yveCRV.

André Cronje:

Great information about the new yveCRV safe This is a new kind of meta-vault, this type of vault symbiosis was the ultimate goal of the aspiration, so seeing one come online is really exciting.

– yveCRV gains higher costs than the basic veCRV

Other things being equal:

This “backscratcher” safe is really neat. A more positive sum approach compared to parasitic farms compared to each other. At this rate, it would only take more than 2 years (note: apy varies) to recover income from the CRV deposit, but if you use other yearn’s products it will benefit them as well.

Yearn Finance presents its new safe

A cryptocurrency analyst using Twitter handle Ceteris Paribus (@ ceterispar1bus) delved into the new vault, claiming it was a more positive sum approach than farms, being parasitic to each other. other.

The idea is to establish a safe with restricted withdrawals or locks – in this case, for a period of four years. Depositors would earn returns on both the four-year veCRV lockdown return, in addition to a small percentage of any increases to the stablecoin and Bitcoin Curve vaults .

The protocol explained why one had to take advantage of Curve and increase the locked-in liquidity in order to provide these better returns;

Optimal use of Curve remains the key return strategy for many pools today. Yearn needs a huge and growing pool of locked vCRVs to support high returns on multiple vaults as stablecoin and bitcoin deposits increase.

veCRV is the abbreviation for Voting Escrow CRV and is a token used for governance proposals and pool settings in the Curve Finance DAO. CRV token holders receive veCRV tokens by locking their CRV tokens, and Yearn Finance is now providing the new pool offering additional rewards for long-term locking.

Yearn’s other three CRV chests will also benefit from an increase in performance thanks to the “backscratcher” chest – hence the nickname meaning “back scratcher” in English.