YeFi (YEFI) Decentralized Finance Platform Aiming to Simplify Yield Farming

YeFi (YEFI) is aiming to make it easier for DeFi newbies to avoid some of the pitfalls of yield farming and make the most of their cryptoassets. YeFi claims its protocol allows users to stake a wide variety of assets and enjoy an annual percentage yield (APY) of up to 80 percent.

YeFi Making Yield Farming Easier

The success of decentralized finance (DeFi) in the past year has had a positive effect on all sectors of the industry, from decentralized exchanges (DEXes) to yield farming protocols and more. 

While DeFi yield farming – a process that allows anyone to stake their cryptoasset and earn fixed or variable APY – has proven to be one of the surest ways for cryptocurrency investors to make their monies work for them and bring in decent profits on a daily basis, successfully navigating these platforms can be quite a herculean task for newbies.

YeFi says this is partly due to the fact that a good number of these yield farming protocols are not as attractive as they look.

“While many yield farms often boast of impressive APYs, sometimes up to 100+ percent per year, this needs to be weighed against the performance of the token that must be staked. Consider a yield farm that offers 100 percent APY. If the staked asset loses less than 50 percent of its value within a year, then this can be considered a net positive investment. But in many cases, the staked asset drops faster than yields are accrued, making it a net negative investment,” declared YeFi.

Against that backdrop, YeFi says it’s crucial for yield farmers to thoroughly consider the bullish potential of any asset they wish to stake, and farm only assets with a strong bullish trajectory. However, YeFi says this can be difficult to achieve, as many yield farming protocols do not give users the choice to stake their preferred tokens – since they either only support their own native token or assets with poor market performance.

Enter YeFi

YeFi (YEFI) claims to offer yield farmers multi-asset yield farms that support a wide variety of different digital assets. The project says yields on the YeFi protocol are dependent on the computing factor of each asset. 

On the YeFi platform, Bitcoin (BTC), ether (ETH), and tether (USDT) come with a 1x computing factor, while filecoin (FIL), and YEFI, the native token of YeFi have a computing factor of 1.5x and 2x respectively.

https://t.co/xP3o61e2dl supports staking YEFI, FIL, BTC, ETH, BNB, USDT and YTA to generate passive income with more than 50% APY. Safe and you can withdraw the profits anytime. What crypto would you like us to support next?

— YeFi.one (@yefi_platform) August 3, 2021

With up to 80% APY available and daily payouts, YeFi lets users pick the asset they’re most comfortable with staking — helping to maximize their odds of achieving an attractive return on their investment.

In general, stablecoin farms eliminate the need to manually account for volatility, since they are by definition stable. This will help you better project your returns over the farming period.  

Early is Almost Always Better

When it comes to yield farms, earlier participants generally net higher yields than those that join late. This is a consequence of the way that many yield farms operate. 

In general, most yield farms will either mint or have already set aside a fixed number of tokens to be distributed between all participants in a yield pool. This is usually divided between participants based on their share of the total value locked in the pool, such that somebody who contributes 10% of the total locked value will receive 10% of the reward pool per reward period. 

This means that the yields are usually highest right after the pool is launched, since the total amount of value staked is low, leading to a high APY. As the total locked value (TVL) increases, the rewards decrease proportionally — meaning the early bird really does catch the worm in this case. 

Because of this, it’s important to check back regularly to see if the expected APY has changed. This will often decrease considerably if the yield farm becomes extremely popular, but can also increase if it loses popularity or the farm introduces other mechanics to boost the yield. Generally, the later you join, the worse your yields will be.

In any case, checking up on your deposits can help you maximize your yields by allowing you to double-down when yields are high, or pull out your funds if the APY is no longer competitive.