Bessie Liu


<p>Following the introduction of ERC-4626, tokenized vault deployments have remained steady.</p>



<p>ERC-4626 is a standard that is designed to introduce implementation techniques and parameters for yield-bearing vaults in crypto. The standard was introduced in early May.</p>



<p><a href="https://dune.com/queries/2641987/4389806">Data</a> compiled by Dragonfly data scientist Hildebert Moulié shows that every week following the introduction of ERC-4626, over 50 tokenized vault deployments have occurred across EVM-compatible blockchains.&nbsp;</p>



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/ENb3fIooPdyQRszYXFkclInEJMDT5OImDj960O-GbJ0-J3sLyeQsQI3-GJOhR6GRnVN_3CVkhOXhOT7QPIpxpfvEMy9PHmQ--WxhGL8CG49KSE4ju6fp5CaiEMOMXX1IHt2ksCyeW_EXBgTs5b9PDgw" alt=""/></figure>



<p>In a previous interview with Blockworks, Superform co-founder Blake Richardson contended that this new standard would be as important to DeFi as ERC-20 — a commonly used token standard — is to the <a href="https://app.blockworksresearch.com/glossary#initial-coin-offerings-icos">ICO boom</a>.</p>



<p><strong>Read more:</strong> <a href="https://blockworks.co/news/tokenized-vault-standard-ethereum">Tokenized vault standard on Ethereum set to ‘kick off new DeFi summer’</a></p>



<p>“I think the compound benefit of standardization will lead more people to adopt DeFi because they can start to trust it more,” Richardson said.</p>



<p>To a certain extent, Richardson was right. Although tokenized vaults already existed before ERC-4626, it wasn’t until these principles were introduced that their implementations became more consistent.</p>



<p>Prize savings protocol PoolTogether was one of the most recent to make use of the standard. PoolTogether revealed during a private beta launch that v5 of its protocol introduces the permissionless use of any token that has a 4626 yield source.&nbsp;</p>



<p>Users can deposit tokens into PoolTogether’s standard ERC-4626 vault in order to win prizes or customize their own vault. These vaults will create yield and liquidate the yield into POOL tokens, the protocol’s native asset, reflecting the vault’s likelihood of winning a prize.</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p><strong>Get the news in your inbox. Explore Blockworks newsletters:</strong></p>



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown"><strong>The Breakdown</strong></a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch"><strong>0xResearch</strong></a>: Alpha in your inbox. Think like an analyst. </li>
</ul>


erc-4626

Tokenized vaults see steady deployments after ERC-4626 adoption

Aaron Ahmadi


<h2 class="wp-block-heading">What is Yearn Finance (YFI), and how can you invest in it? </h2>



<p>Yearn Finance is a suite of yield-optimizing DeFi protocols anchored on the Ethereum blockchain.</p>



<p>Want to read more like the Guide to Yearn Finance? Scroll to the bottom for additional reading and a list of other <a href="https://cms.blockworks.co/category/education/" target="_blank" rel="noreferrer noopener">Blockworks Investor&#8217;s Guides</a>.</p>





<h2 class="wp-block-heading">A quick primer on DeFi</h2>



<p>All you need to get started in DeFi is an internet connection. Its core thesis is personal financial autonomy — removing unnecessary middlemen in banking, investing and transacting.</p>



<p>Yearn takes this thesis to logical extremes, providing a fast, decentralized method to use digital assets in ways that mirror traditional finance, including lending and borrowing, as well as in ways specific to DeFi (decentralized finance), like staking or yield farming.</p>



<p>Chief among today’s most-utilized DeFi-oriented blockchains is the Ethereum chain, which Yearn Finance was built on.&nbsp;</p>





<h2 class="wp-block-heading">​What is Yearn Finance?</h2>



<p>The central goal behind Yearn Finance is to maximize returns on your cryptocurrency by arbitraging different lending platforms in search of the best available yield — shifting between dYdX, Aave and Compound, as interest rates vary between these platforms.</p>



<p>Within the Yearn Finance ecosystem, investors have a choice of three core products:</p>



<ul class="wp-block-list"><li><a href="https://yearn.finance/#/ironbank" target="_blank" rel="noreferrer noopener">Iron Bank</a></li><li><a href="https://yearn.finance/#/labs" target="_blank" rel="noreferrer noopener">Labs</a></li><li><a href="https://yearn.finance/#/vaults" target="_blank" rel="noreferrer noopener">Vaults</a></li></ul>



<p>Below, we&#8217;ll take a closer look at each option and how they fit within Yearn&#8217;s larger ecosystem.</p>





<h2 class="wp-block-heading">The case for Yearn</h2>



<p>With $3.51 billion in current total value locked (TVL), Yearn Finance is one of the fastest-growing DeFi projects to date with promising potential for its future. Major mergers with other protocols like SushiSwap and Pickle have deepened Yearn’s market reach in the DeFi world. </p>



<p>For those thinking about Yearn for the long haul, it’s worth noting the limited supply of YFI tokens. Technically speaking, users can vote to change the rules on token economics. However, if Yearn’s limited supply stays the same, then Yearn Finance will follow a similar limited-supply model to bitcoin. At the time of this writing, 1 YFI token is $20,610.55. The predetermined total of 36,666 YFI are in circulating supply.</p>



<p>Yearn Finance remains decentralized and community-governed, allowing the Yearn community to shape the future of the project. With a robust offering of products that sets the bar for other DeFi projects, some look to Yearn Finance as the standard in the ever-evolving space. Remember, DeFi is in its infancy.</p>



<p>More conceptually, Yearn Finance remains true to its core, decentralized values in that it continues to uphold transparency and is governed by the users. That means everyone starts on equal footing. Token holders get to vote on the rules. All proposals require over 50% approval before passing. There’s also a <a href="https://yearnweb.substack.com/" target="_blank" rel="noreferrer noopener">newsletter</a> which users can subscribe to stay up-to-date on planned releases, bug fixes, etc.</p>



<p>What began as the first <a href="https://docs.yearn.finance/resources/defi-glossary#fair-launch" target="_blank" rel="noreferrer noopener">fair token launch</a> has evolved into one of DeFi’s most powerful investment opportunities. Of course, nothing in the crypto world comes without risk, so proceed with care.</p>





<h2 class="wp-block-heading">How to invest with Yearn Finance</h2>



<h3 class="wp-block-heading">Option 1: Buy YFI</h3>



<p>As an investor, you have options with Yearn Finance. If your plan is to simply own the YFI token, you can buy it on exchanges like Uniswap or Curve. Then, simply store your assets in a crypto wallet. You can also directly cash out your YFI when you decide to take profits. YFI is also available on centralized exchanges like Binance or Kraken.</p>



<h3 class="wp-block-heading">Option 2: Yield-farm with YFI</h3>



<p>Within Yearn Finance’s platform, the suite of products ranges from low to high risk. One of the simpler, lower-risk services is <a href="https://yearn.finance/#/ironbank" target="_blank" rel="noreferrer noopener">Iron Bank</a>, which allows users to borrow using crypto as collateral without having to sell.</p>



<p>For those with a somewhat higher risk-appetite, there’s <a href="https://yearn.finance/#/vaults" target="_blank" rel="noreferrer noopener">Vaults</a>. Simply choose a strategy from Vault&#8217;s options, deposit the proper tokens and let Yearn tech help maximize yield through shifting capital, auto-compounding and rebalancing. Keep in mind there are no regulations to protect customers or a customer support number to call if there’s a bug in the code or in the event of a hack. While Yearn Finance is known to be secure, it remains experimental; it’s best to know your own risk tolerance.<br><br>Unlike traditional banking products, you can withdraw your investments with Vault at any time.</p>



<p>Finally, Yearn <a href="https://yearn.finance/#/labs" target="_blank" rel="noreferrer noopener">Labs</a> offers an unconventional high-risk, high-reward approach. According to their documentation:</p>



<p>&#8220;The emerging strategies you&#8217;ll find here are the newest and most unconventional around. Be sure to review the About sections carefully and make sure you understand token locking, impermanent loss, and other risks before proceeding.&#8221;</p>



<h3 class="has-black-color has-text-color wp-block-heading">Final considerations</h3>



<p>As DeFi products go, Yearn Finance boasts a relatively simple and effective collection. However, emerging markets change quickly, so it&#8217;s vital to stay informed and keep up with the latest news and insights.<br><br>You can do so here, at <a href="https://cms.blockworks.co" target="_blank" rel="noreferrer noopener">Blockworks.co</a>.</p>





<h2 class="has-black-color has-text-color wp-block-heading">Additional resources</h2>



<p><a href="https://cms.blockworks.co/yearn-finance-launches-yfi-buyback-program-markets-wrap/" target="_blank" rel="noreferrer noopener">Yearn Finance Launches YFI Buyback Program: Markets Wrap</a></p>



<p><a href="https://cms.blockworks.co/the-investors-guide-to-defi/" target="_blank" rel="noreferrer noopener">The Investor&#8217;s Guide to DeFi</a></p>



<p><a href="https://docs.yearn.finance/getting-started/using-yearn" target="_blank" rel="noreferrer noopener">Getting Started Using Yearn</a></p>



<p><a href="https://docs.yearn.finance/resources/faq" target="_blank" rel="noreferrer noopener">Yearn Product FAQs</a></p>



<p><a href="Yea" target="_blank" rel="noreferrer noopener">Podcast: The Rebirth of Tokenomics: Yea</a><a href="https://cms.blockworks.co/podcast-the-rebirth-of-tokenomics-yearn-finance-and-ve33/" target="_blank" rel="noreferrer noopener">rn Finance and Ve(3,3)</a></p>



<p><a href="https://cms.blockworks.co/the-investors-guide-to-defi-2-0/" target="_blank" rel="noreferrer noopener">The Investor’s Guide to DeFi 2.0</a></p>





<h3 class="wp-block-heading">Get educated. Check out <a href="https://cms.blockworks.co/the-investors-guide-to-bitcoin/" target="_blank" rel="noreferrer noopener">The Investor&#8217;s Guide to Bitcoin</a>, <a href="https://cms.blockworks.co/the-investors-guide-to-nfts/" target="_blank" rel="noreferrer noopener">The Investor&#8217;s Guide to NFTs</a>, <a href="https://cms.blockworks.co/the-investors-guide-to-defi/" target="_blank" rel="noreferrer noopener">The Investor&#8217;s Guide to DeFi</a>, <a href="https://cms.blockworks.co/the-investors-guide-to-the-metaverse/" target="_blank" rel="noreferrer noopener">The Investor&#8217;s Guide to the Metaverse</a> and <a href="https://cms.blockworks.co/the-investors-guide-to-music-nfts/" target="_blank" rel="noreferrer noopener">The Investor&#8217;s Guide to Music NFTs.</a></h3>





<p><em>The content of this webpage is not investment advice and does not constitute any offer or solicitation to offer or recommendation of any company, product or idea. It is for general educational purposes only and does not take into account your individual needs, investment objectives or specific financial circumstances.</em></p>


Vaults

Newsletter

Blockworks Research