A little-known cryptocurrency is the latest to send shockwaves through the industry after rising over 10,000% just a few days after it launched.
The crypto analysis platform Santiment is tracking the performance of YFI, the governance token of decentralized finance (DeFi) protocol yearn.finance.
An analyst at Santiment explains that the token helps investors generate passive income by leveraging platforms that offer the best yields.
“In a nutshell, YFI is something that makes you money, good ton of money. It is the only thing right now in the DeFi market that gives you the highest yield…
How it does that is by taking whatever you deposit, and it actually goes around and searches all the other platforms, whatever protocols are out there, and finds the best yields in the area and then deposits over there, ensuring that you get the best yields. Think of it as an automated yield aggregator.”
While its creator Andre Cronje insists that YFI has no financial value, the market begs to differ. The native token of yearn.finance traded at $31.65 on July 18th before exploding to an all-time high of $3,458.31 on July 25th – a meteoric rise of 10,828.6% according to CoinGecko.
Although DeFi tokens are the hottest assets in the crypto space right now, Santiment highlights the fact that gains are never guaranteed and the market is extremely volatile and risky.
“It’s important to note that DeFi is pretty nascent. There are very real inherent risks involved: Smart contract exploits/bugs/hacks, collateral getting liquidated, Stablecoin de-pegging.”