Bitcoin has been on an impressive run gaining more than 30% since the start of the year as it continues to flirt with one-year highs of two one-year highs of 11,800. However, its hefty price is no longer the talk of the cryptocurrency space, a mantle it has held for years. Decentralized Finance (DeFi) token, yEarn.Finance is the latest altcoin taking the cryptocurrency space by storm. The DeFi token has risen by more than 30,000% to highs of $15,000, giving Bitcoin a race for its money on the race to the $20,000 mark.
YFI Token Explodes
The valueless token has taken the crypto space by storm despite making its debut into the market in July. Its value skyrocketed immediately after launch, rallying from lows of $31 to highs of $1,000. The rally has only continued to gather pace, outshining Bitcoin when it comes to price. A 29% single-day rally saw the altcoin add $2,889 to its value in a single day.
YFI Token has shot up to record highs on investors pouring hundreds of millions into its protocol that seeks to identify and exploit some of the best opportunities in the decentralized finance space (DeFi) space.
As of July, the yEarn protocol was valued at about $9.3 million. It has since increased, clocking highs of $600 million while its price has surged to highs of $16,000 in recent days YFI market capitalization remains subdued at $600 million compared to Bitcoin’s $117.8 billion. It is currently rated as the 45th largest cryptocurrency by market cap.
YFI Price Catalysts
DeFi Token is up by more than 100% over the past week and up by over 30,000% over since its debut in July. The meteoric rise could be attributed to among other things growing demand for Decentralized Finance DeFi products and tokens associated with the network.
The token continues to enjoy high valuation in the market in part because of a unique monetary supply. YFI tokens are capped at 30,000 significantly lower, than that of Bitcoin capped at 21 million.
DeFi price has the potential to continue edging higher, given the limited number of tokens that will ever be in supply. The altcoin supply has been nearly fully minted, with about 29,000 tokens already in circulation based on available data.
How YFI Works
YEarn works by allowing crypto investors to deposit digital assets into protocol designed to identify and execute various DeFi strategies that offer Return on Investments of up to 95%. As a governance token, people are increasingly using the YFI token to determine the overall direction of the protocol. Likewise, it acts as a governance token for the yEarn.Finance site which performs a variety of tasks for DeFi users moving assets in and out of liquidity pools
Strong demand attributed to the scarcity of the yEarn tokens explains why the price is surging. yEarn founder Andre Cronje has already admitted that the price surge is likely coming from a combination of scarcity and the fact that people are using the token in other DeFi protocols.