New hints about v2 vaults have just been dropped by YFI founder Andre Cronje who was hyping up the launch as reported previously in the altcoin news.
While Yearn.Finance is an umbrella Defi ecosystem, it is mostly known for its Vault product. Vaults are contracts where the users can deposit cryptocurrencies like USDC, YFI, and Ethereum and earn a regular yield paid in the coin that was deposited. Vaults allow holders of crypto to earn passive income on their holdings. The v2 iteration of these Vaults is expected to boost the returns and to drive more capital to YFI holders and more value to the overall Yearn ecosystem.
v2 .@bantg pic.twitter.com/apKthQacmj
— Andre Cronje (@AndreCronjeTech) January 13, 2021
Yearn.Finance’s v2 Vaults have long been rumored and the details about them were scarce but new hints show that they are expected to drive more yields to Vault depositors via advanced smart contracts and more moving parts that are expected to increase capital efficiency. Andre Cronje shared a tweet showing the potential yields for the new v2 Vault strategies and as per the tweet, the yields offered are higher than the ones seen in traditional finance along with the fair higher than the ones seen on most Defi applications.
Yields are also expected to increase the YFI Value proposition since it is expected to drive more capital into these Vaults that will later increase the dividends that YFI stakers earn. The yields offered on Yearn.Finance vaults will be boosted by cross-protocol integrations. Cronje explained:
“With Cream v2 (Iron Bank), Alpha Homora v2, and Yearn v2, all vaults become leveraged vaults, and cross asset strategies become viable. Deposit 1k DAI can deposit 1k DAI and 1k USDC into Alpha Curve or 1k DAI and 1 ETH into Alpha Sushiswap borrowed indirectly via Iron Bank. These cross platform strategies allow up to 90x leverage on stable coins and 80x leverage on ETH and allows users to either sell and compound or accumulate the asset. As more collateral is introduced into Iron Bank and Alpha v2 yield becomes agnostic.”
YFI increased a few percent after the announcement and Cronje’s tweets. As recently reported, Uniswap’s Ashleigh Schap trashed a recent article from Yearn Finance founder Andre Cronje who criticized that forked protocols in the DeFi space was becoming too many, with Schap describing the recent merger with sushiSwap as validating a “stolen Dapp.”
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