Recently, DeFi's star currency YFI has attracted the attention of many investors after it went online on major exchanges. Soon after it went online, the price surpassed Bitcoin, rising to a maximum of US$44,000, which was more than twice the price of Bitcoin at its peak. This is the first time Bitcoin has been surpassed by other digital currencies since its founding block was born in 2009. What are the reasons behind the YFI price surge? Who will be the first to break through 100,000 USD or Bitcoin?
YFI is a yearn community governance token, as a reward for those who use the yearn protocol, and added liquidity mining function to this protocol. The initial price of YFI is 0, and the community decides its token price. The essence of the year belongs to the DeFi project. It can be regarded as a smart bank built on Ethereum. In the DeFi liquid mining project, the interest rate of different fund pools fluctuates greatly, and the user manually selects the higher annualized return. The operation process of fund pool is very complicated, so yearn simplifies this process. Users only need to deposit funds into yearn. Through interaction with smart contracts, yearn can view the annualized rate of return of different lending platforms, and then automatically allocate funds. Intelligently match the fund pool with the highest yield for users.
There are many platforms for liquid mining, such as Aave, dYdX, Compound, Nuo, Fulcrum, etc. However, the interest rate of each platform is standardized, the on-chain quotation mechanism is different, and the annualized returns have subtle differences. As providers of liquid funds, they definitely want to put their money in the place where the interest is highest. Yearn plays the role of a lending aggregator. It interacts with smart contracts to view the annualized rate of return of different lending platforms, and then puts the user's funds on the lending platform with the highest annualized yield. This process can also reduce the gas fee. It only needs to be paid once by Year, instead of having 200 users, each person will pay the gas fee once every time they provide liquidity.
Because Yearn can bring higher profits to users who provide liquidity mining, after Yearn launched the governance token YFI, it was immediately rushed by major communities. The total number of YFI issued is only 30,000, and the number is very limited. It was all rushed to launch on July 26.
After the issuance of YFI, in order to ensure that the liquidity will not be withdrawn on a large scale, some community members put forward a proposal for additional issuance to increase the weekly additional issuance of each mining pool, but in the end it was not approved due to insufficient participation. So the community members who agreed with the proposal initiated a hard fork and created a new project YFII with basically the same name as YFI. After YFII went online, driven by the price of YFI, it rose to a maximum of 9489 USD, almost becoming the second currency that surpassed the price of Bitcoin.
After understanding the value of YFI and the current price, many people believe that YFI will be the first to exceed $100,000 before Bitcoin. First of all, DeFi is a hot spot this year, attracting many investment institutions and retail investors. Second, the total issuance of YFI The amount is only 30,000, which is one-70th of the total Bitcoin circulation. It will be easier to pull the market. However, people who have experienced several big bull markets say they are more optimistic about Bitcoin. In the past 10 years, Bitcoin is the best investment product, which has increased by more than 600,000 times. This year is the third halving of Bitcoin. In the first year, according to the market analysis after the first two Bitcoin halvings, Bitcoin will usher in a big rise in the next few months.
For the first halving of Bitcoin, the price has doubled by 100 times; for the second halving, the price has increased by 30 times. Calculated according to this increase, Bitcoin is expected to increase by 10 times this halving, which means it will break through 100,000 USD, so now is the best time to buy Bitcoin.
But buying Bitcoin spot is not as good as buying BitOffer's Bitcoin ETF fund (BTC3X). It adds 3 times leverage to the spot, and also adds an intelligent dynamic position adjustment mechanism and fund compound interest calculation. The minimum return is 3 times and the highest Up to 17 times. If Bitcoin rises by 10 times in the next few months and successfully breaks through $100,000, Bitcoin ETF (BTC3X) can rise up to 170 times, which is obviously more cost-effective than buying spot.