Finance

DFI.money (YFII): What Is It And How Does It Work?

YFII

DFI.Money (YFII) belongs to Year.finance (YFI), a DeFi aggregator platform. This project was launched with the aim of optimizing returns for DeFi investors in July 2020.  Launched in July 2020, this project aims to optimize returns for DeFi investors while adhering to proposed changes to an upgrade plan called YIP-8. In this post, we will find more about it. Let’s get started.

DFI.Money (YFII): All You Need To Know

What is DFI.Money?

DFI.Money’s native token is YFII, a stable supply token earned by liquidity providers based on network interactions. DFI.Money (YFII) is a DeFi protocol that facilitates collection of returns and uses the token halving model to ensure fair distribution of tokens. YFII is a fork of YFI DFI.Money (YFII) decentralized credit is the driving force behind decentralized finance (DeFi) projects. Those who provide liquidity to these projects earn interest through yield farming or liquidity mining. Some DeFi networks have their own tokens that increase the rewards farmers get. Others, such as YFII, have forked from other protocols to avoid a reduction in pool liquidity through a planned halving model. 

In the Chinese market, YFII gained the trust of the DeFi community shortly after leaving YFI. Reasons given for the hard fork include preventing wealthy participants from spoiling the party.

DFI.Money (YFII) is a DeFi protocol that facilitates collection of returns and uses the token halving model to ensure fair distribution of tokens. The protocol is currently very popular in the Chinese DeFi market. Yearn.finance (YFI) was developed in the west, while DFI.Money (YFII) was developed in the east. Compared to the western version of the project, the version in the new market has shown much greater success.

After its launch towards the end of June 2020, several Chinese liquidity miners joined the new strength, but a few days later the network attracted cryptocurrency exchanges, virtual currency hedge funds, mining pools and central finance projects. The protocol has a strong community gathered on WeChat. This illustrates the diplomatic stalemate between China and the US since the discussions on the social media platform have effectively blocked English speakers from the US.

The DFI.Money (YFII) network has blocked all methods for updating or replacing. This will make it difficult to upgrade the system’s token economy. This might not be the ideal thing to do in the bitcoin era.

Experts have warned that the platform’s community should seek ways to decentralize a vibrant ecosystem to attract, but as it happens, the community may also be after the profits from crop farming.

Management issues in the network are delegated to 11 signatories using the multi-signature model. In this case, seven of the 11 signatories must agree to reach a consensus. However, this is a temporary management model as the project provides management through the decentralized autonomous organization (DAO). Only with DeFi protocols such as SushiSwap YFII’s smart contract cannot be audited. In addition, the buying and selling of project tokens can be done on a few known exchanges.

What is the background of DFI.Money (YFII)?

To have a clear background on how and why DFI.Money (YFII) was born, one should start with Yearn. Yearn does not need a DeFi protocol like Compound or Aave. Instead, it collects deposits and sends them to a network that will give depositors the highest interest. The Yearn platform uses yToken to facilitate the withdrawal of earnings and deposits, but in Yearn management is enabled using the YFI token.

As the token was given to farmers to enable the pools to provide liquidity, the pool liquidity decreased markedly due to the weekly supply increase of 30,000 YFI. YIP-8, known as the yEarn Improvement Proposal, was issued to prevent inflation. The proposal includes the start of the weekly halving of issued YFI tokens to ensure a stable change in system liquidity.

When the votes were cast, 80 percent were positive and 19 percent were negative. Since the required 33 percent majority was not achieved, YFII was born through a hard fork and implemented the YIP-8 proposal.

In the first week, 30,000 tokens were removed from the total circulation. YFII is run by an anonymous team using the pseudonym “White Noise” who provides updates on Medium. The YFI clone argues that the halving model mirrors the Bitcoin (BTC) model so that the tokens will be fairly distributed to the community.

Who are the founders of DFI.Money?

DFI.Money originated as a hard fork of Yearn.finance, the aggregator of DeFi returns created by Andre Cronje. Cronje split from iEarn, the original incarnation of Yearn.finance, in early 2020 only to return to continue its development, whereupon its popularity has grown significantly as DeFi has become more mainstream.

In July 2020, Yearn.finance’s mining and farming of the YFI token ceased and the proposal to protect liquidity from whales received 80% support among protocol participants, but was not accepted as Yearn.finance failed to achieve the required 33% qualification.

As a result, a group of users chose to fork the protocol to create DFI.Money with their own token YFII.

The hard fork implemented the proposal known as YIP-8, following a pattern popularized by Bitcoin (BTC), which saw YFII rewards decrease every week.

What Makes DFI.Money Unique?

DFI.Money (YFII) is subject to different protocol rules for its token and fulfills the same role as Yearn.finance in the DeFi market thanks to some new features. Its appeal is therefore aimed at previous users who voted in favor of YIP-8, and newcomer DeFi investors who want to maximize returns by providing liquidity.

DFI.Money (YFII)’s website states that its protocol is community owned and does not offer trading incentives such as developer rewards by default.

Users join one or both of two liquidity pools with Curve (Curve, CFI) or Balancer (Balancer, BAL) and receive YFII tokens as a reward for providing liquidity.

DFI.Money (YFII) has also introduced a new feature, Vault, which aims to automatically generate the highest return on any token according to the strategies submitted by users, without manually setting up transactions by the users themselves.

How is yield farming done in DFI.Money (YFII)?

DFI.Money (YFII) has one of the highest ROIs, with some pools as high as 2000 percent. Despite the high return on investment, liquidity mining continues to bear its share of risks such as token price volatility and unseen errors in the smart contract.

In DFI.Money (YFII), the farming yield procedure depends on the token that the crop farmer is willing to risk. This is further divided into three pools.

yCRV (yCurve)

This pool is for holders of yCurve tokens. A person trading for the purpose of farming in DFI.Money (YFII) must exit the third pool in YFI to receive yCRV tokens. Those without tokens can visit www.curve.fi/iearn and deposit USDT, USD Coin (USDC), True USD (TUSD), or DAI to generate yCRV tokens.

The tokens are then put into the Yearn pool. Staked funds are automatically invested in different DeFi projects. While this has the potential for increased returns, it also carries a high probability of loss if these systems are compromised.

DAI Balancer

The second pool uses DAI or YFII tokens to allow yield farming. Staking is done in the Balancer Liquidity pool, where it generates the BPT tokens staked in the Balancer (YFII-DAI) pool. It should be noted that adding liquidity to the second pool is stopped directly to reduce the risk of endless minting.

Funds invested in this pool are for market maker automation. Therefore, an unforeseen large liquidation of YFII tokens could adversely affect the token price, resulting in less asset pooling.

yCRV Balancer

In the third pool, a yield farmer must allocate YFII tokens in the “management” pool to receive rewards. In addition, although the fourth pool is suggested, it is not active at the moment. The fourth pool will make it easier to earn interest on thriving DeFi assets by staking YFII or its derivatives.

Number of DFI.Money (YFII) Coins in Circulation

YFII is an ERC-20 standard token with a fixed supply of 40,000 YFII. No pre-production, pre-sale, or developer-allocated tokens were taken from the total supply, as per the specifications and accepted specifications in YIP-8.

DFI.Money states that the only way to earn YFII is to provide liquidity to the protocol. Tokens are distributed according to liquidity provision and rewards decrease weekly. The two liquidity pools each started with a supply of 20,000 YFII.

Is DFI.Money (YFII) Network Secure?

DFI.Money states that YFII has a guaranteed fixed supply of 40,000 coins that cannot be manipulated by developers. This was made possible by the sending of keys that allowed new tokens to be minted to an address called a “black hole” and access to them was permanently lost. Also, the developers have posted links to processes that show the transfer of keys to the black hole.

Where to Buy DFI.Money (YFII)?

YFII has become a popular trading token since its launch. As of October 2020, cryptocurrencies are available on multiple major exchanges with trading pairs that include stablecoins and other DeFi tokens.

The world of DeFi is rapidly changing to include contributors like SushiSwap and payoff collectors like YFII.

Also, with yield farmers rushing for fast returns, the current liquidity mining spree is remotely similar to the initial coin offering (ICO) spree of 2017. As the DeFi protocol and its forks take shape, time will show who is playing who and who is the side being played here.

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