Yearn.finance leaps after Tokenomics’ new proposal

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Yearn’s YFI token is up almost 25% during the day and over 100% during the week. The price growth is likely tied to a new Yearn governance proposal that would involve major revisions to Yearn’s tokenomics. The proposal has not yet been adopted but appears to have had some effect on the market. Share this article

Yearn.finance token holders benefited from a strong price appreciation this week, with the YFI token rising nearly 25% today alone.

Year increases amid general market downturn

Yearn.finance (YFI), a DeFi aggregator with a locked-in total value of over $ 5.5 billion, is on the rise at a time when most other tokens and coins in the crypto markets are down. In addition to today’s 25% price increases, YFI is up about 100% from last week.

In May, YFI hit prices of over $ 82,700 per token, but only traded up to $ 19,594 on December 12. At the time of writing, it was priced at over $ 39,100 per token.

The price action likely stems from a proposal circulating within the Yearn community regarding major changes to YFI’s tokenomics. For now, the proposal remains in the mandatory discussion phase and is not yet eligible for formal passage.

The proposal focuses on four key steps, to be performed sequentially, to modify the tokenomics of the YFI token:

First, a portion of the YFI tokens would be redeemed by Yearn’s Treasury and distributed as a reward to YFI holders who are actively involved in the governance of Yearn. Second, four different methods by which YFI holders could be rewarded for locking their tokens are introduced. Third, the proposal would give Yearn developers the flexibility to deploy these new features as they see fit. Fourth and finally, the proposal introduces a restriction on the governance of the year: only YFI staked in xYFI (from phase 1) and / or locked (according to phase 2 and following) would be eligible for use in the vote.

With the massive combustion of ETH from EIP-1559 creating some excitement around a supply shock and other protocols like Polygon following suit, it is possible that Yearn holders are banking on a growing token shortage. (resulting from deadlocks) if the components of this major governance proposal are adopted and implemented.

Disclosure: At the time of writing, the author of this article owned ETH and several other cryptocurrencies.

Disclosure: Andre Cronje, founder of Yearn.finance, is a shareholder of Crypto Briefing.

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