How to Buy Yearn (YFI) Tokens in Canada

“Yearn Finance is unique in that it uses automation to allow investors to maximize their profits from yield farming”

Yearn was originally founded in early 2020 by Andre Cronje, a software developer and entrepreneur from South Africa. The Yearn platform is built on the Ethereum network. and seeks to maximize users’ returns on their crypto through lending and trading (otherwise known as “yield farming”). The goal of Yearn is to manage crypto deposited by users and earn them passive income in the simplest way possible. Andre created the Yearn token (YFI) to help govern the Yearn Finance platform and enact changes that further the development of the project.

If you are wondering how to buy Yearn tokens in Canada, Netcoins is a publicly-traded, fully regulated crypto trading platform based in Canada. With 0% funding fees, free cash withdrawals, and live customer support service seven days a week, we make it simple for Canadians to buy Yearn (YFI) and other cryptocurrencies.

What Can You Do With Yearn.Finance?

Undeniably, the simplest thing to do is to buy Yearn hoping for the price to go up in the long-term. However, there are ways to make additional income on the tokens you hold through other decentralized finance protocols.

One option is going with Yearn’s staking/governance portal. After purchasing your tokens through a reputable crypto exchange such as Netcoins, the first step would be to transfer your YFI tokens to a cryptocurrency wallet like MetaMask. After doing so, you can connect to Yearn’s portal, which enables you to receive both interest on your Yearn holdings and an opportunity to vote on community decisions. This option could arguably be the easiest way to make additional income as it involves no lending, minimizing the risks on your behalf.

Related article: Staking 101: How Using Cryptocurrency to Secure Blockchain Networks Works 

The other option includes lending protocols such as Yearn Finance which take your YFI tokens and lend it out to other individuals. Keep in mind, as with all lending, this does come with risks and potential rewards. This is why it’s always important to do your own research and decide for yourself whether you are comfortable taking on these risks.

Weighing all the options, simply buying and holding Yearn for the long run could be a solid choice for some people that minimizes room for error. However, if you wish to earn passive income on your investment, staking through the Yearn portal could be an in interesting choice to consider after doing your research.

 

How is Yearn.Finance Unique?

What makes Yearn Finance unique is its value proposition to crypto users worldwide. The project’s goal is to simplify the decentralized finance (DeFi) process while also allowing users to maximize returns on their crypto investments. One of the challenges people faced were the complexities surrounding decentralized finance, which included clunky interfaces and complex processes. Yearn took on these challenges and created 3 different products:

Earn: This product focuses on lending. It acts as a yield aggregator by leveraging different DeFi protocols (projects) and strategies to maximize user profits. This automated process ensures users earn the highest interest rate possible on their holdings. 

Vaults: Cryptocurrency vaults are similar to traditional savings accounts. The product allows users to choose between over 10 different investing tactics to maximize profits on their crypto holdings. 

Iron Bank: This product caters to both users and protocols and lets them borrow money against the crypto that they hold (as collateral). This is comparable to the traditional finance space with a secured credit line in which the borrower uses an asset, usually a car or home, as collateral to secure a loan.

Yearn’s deep and unique product offering differentiates them from other crypto lending projects, setting them up as one of the key players in the decentralized finance lending space.

 

Why Invest in Yearn?

Yearn has gained significant traction since its creation as an alternative to the traditional finance space. In a system normally filled with financial institutions, high fees, and a total lack of transparency, Yearn offers an opportunity to invest in the revolution of traditional lending as we know it today.

Yearn has a unique product offering. With three products that offer investors the opportunity to take full advantage of the crypto assets they hold, Yearn can be a great platform for crypto investors.

There is a max supply of Yearn coins. Similar to bitcoin, Yearn has a supply cap of 36,666 YFI coins that will exist at any point in time. This makes it a hedge against things such as inflation.

The lending space is massive. Currently totalling over $7 trillion USD in size, the worldwide lending sector is ready for disruption. With Yearn’s solid product offering and potential for future innovation, the platform is perfectly positioned to take advantage of the massive lending market.

Yearn is decentralized. In contrast to a majority of large financial institutions, Yearn is entirely transparent. Its network is not controlled by a single entity or individual, which helps to ensure its integrity.

How Do I Securely Store My YFI?

You can buy YFI tokens from crypto trading platforms, like Netcoins, and leave your YFI inside the platform. However, there are much safer options to storing your YFI as leaving them in exchanges can expose them to certain risks like hacking and theft.

The safest option to keeping your YFI tokens secure is to transfer them into a YFI wallet. A YFI wallet is a type of digital wallet that is used to send and receive YFI, similar to a Google wallet or a physical wallet.

There are four different types of YFI wallets: hardware wallets, desktop wallets, mobile wallets and web wallets.  

Hardware wallets look like a USB device. They are considered to be offline wallets because they’re not connected to the internet. The fact they’re offline makes them more difficult to find and to hack. As such, they’re typically considered the safest option to store your YFI. 

Desktop wallets on the other hand are programs that store your YFI on your computer’s hard drive. Mobile wallets perform the same function as a desktop wallet but on a mobile device instead. 

Finally, a web wallet is an online service that sends and stores your YFI on your behalf anywhere, anytime. Similar to checking your email. 

Desktop, mobile and web wallets are all connected to the internet (and referred to as “hot wallets”). Like mentioned earlier, they are more susceptible to potential risks. On the other hand, hardware wallets (or “cold wallets”) are considered safer options as they are not connected to the internet. 

This is why it’s often advised that Canadians pull out their YFI tokens from crypto trading platforms and send them directly to a hardware wallet. Only in this way, are they in full possession of their YFI and can keep them secure. 

 

Is Yearn a Smart Investment?

2021 was a solid year for Yearn, which saw just over 67% price appreciation from beginning to end. With tailwinds such as further adoption, product expansion, and the general direction of the crypto market, Yearn’s future can look promising.

A major factor to consider with Yearn is whether the adoption of decentralized finance (DeFi) continues. The total value locked in DeFi grew over 10 fold in 2021, from $20 billion USD to over $230 billion USD. This is a clear signal that DeFi is growing at a speedy rate, which may positively impact Yearn as it grows with the industry. 

With positive growth in both the DeFi and lending space in mind, there are some factors to be aware of before opting to invest in YFI. In March of 2022, the founder of Yearn, Andre Cronje, decided to leave Yearn, alongside a handful of other products, citing a “toxic” DeFi community as his primary reason. It is important to recognize that his departure had nothing to do with Yearn as a platform, but a personal decision he made for the betterment of his mental health. Luckily, the platform was never solely run by Andre Cronje, so further development may likely continue.

With a platform that presents a clear value proposition to new and experienced crypto investors alike, Yearn can be an opportunity to invest in a solid DeFi project and the disruption of the traditional finance space. These, among many reasons, make Yearn an appealing bet for some investors. And if you are interested in buying Yearn in Canada, Netcoins provides a simple and easy way to get started.

This post is for informational purposes only. For proper financial advice, we recommend you speak to a financial advisor.