Launched in July, the Yearn token (YFI) skyrocketed, and its price reached US$ 38,800.00, a 700% increase, according to Coindesk. Thus, it surpasses with ease the record reached by the bitcoin in 2017 of US$ 20,000.00, as Webitcoin recalls. With the move, the DeFi (decentralized finance) company’s market value has overcome the US$ 1 billion mark, according to CoinTelegraph.
According to the site, three factors contributed to this high. The first is a possible partnership with FTX, one of the largest crypto derivatives platforms. The possibility of a partnership was suggested after Andre Cronje, developer of Yearn.finance, had mentioned he was collaborating with FTX CEO, Sam Bankman-Fried.
Listing in Aave boosts price
Another contributing factor in valuing Yearn’s token is its listing on Aave —the world’s largest DeFi protocol. In it, the total locked amount sums up more than US$1.52 billion. This could further boost the YFI, which already has nearly US$ 1 billion of total locked value.
Finally, technical indicators contributed to the movement. One example is recent releases of several Yearn products in July. Novelties ranging from safes to decentralized insurances help boost the token.
Dependency on innovations could threaten the Yearn token
Thanks to innovations, the future of DeFi is promising, says blockchain research firm Glassnode, in a report from the end of August:
“The existence of an innovation network surrounding DeFi means there is a constant source of new and profitable financial games, while bitcoin has seen little growth in terms of its value proposition or ecosystem”.
Some analysts heard by Cointelegraph believe that Yearn’s value could reach several billion dollars. However, others point to the risks on the YFI horizon. Such as Cronje’s dependence on innovations. There is also the risk of falling yield. If there is this retreat, investors may lose interest in the token.
