![\"Yearn](\"https:\/\/www.cryptocabaret.com\/wp-content\/uploads\/2020\/09\/yearn-finance-vault-users-lock-139m-farmers-claim-collateralized-eth-gathers-90-apy-768x432.jpg\")
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On September 3, 2020, the well known Yearn Finance defi project “paused” the popular ethereum liquidity vault (yETH) service, after locking in a significant $139 million. Yearn’s vault feature launched on Wednesday, and saw $100 million deposited on the first day. The vault hype has also caused the Maker DAO project to make a governance call in order to allow more DAI minting.<\/strong><\/p>\n The defi project Yearn Finance has been a topical conversation within the crypto community, as last week the project’s native YFI token climbed awfully close to $40,000 per token.<\/p>\n Today, YFI is swapping for $32,000<\/a> per token and the Yearn Finance team launched the anticipated vault service on Wednesday. The Yearn vault system allows users to yield farm very high yields from a number of defi applications used.<\/p>\n Essentially ETH<\/a> collateral is used to mint the stablecoin DAI using maker by leveraging a debt position.<\/p>\n Then the infrastructure uses the DAI to yield high interest via the Curve.fi pool and a number of decentralized exchanges (dex) like Uniswap. According to a number of Yearn vault users, vault participants are accruing a whopping 89-92% APY<\/a> on the collateralized ETH<\/a>. However, some users disagree with the 89% APY estimate and believe the level is more likely between “65-75% APY<\/a>.”<\/p>\n When millions of dollars worth of ethereum (ETH<\/a>) was flowing into the vault at an exponential rate, the Maker DAO team decided to change the ETH<\/a> debt ceiling by 120 million ETH<\/a> to 540 million ETH<\/a>. The move allows for an increase of DAI minting in order to help facilitate the Yearn vault system and other vaults.<\/p>\n On Thursday, Yearn Finance’s official Twitter account announced that the team has paused the vault deposits.<\/p>\n “Deposits to yETH have been paused,” the team wrote<\/a> on Twitter. “~70 [million] DAI minted. Withdrawals unaffected. We will allow deposits again in the future. For now, this is a high enough cap to balance between best profits and best risk adjustment.”<\/p>\n Although not everyone agreed with the decision to pause, as a few people said<\/a> that they see “one mention that a cap was being considered anywhere.”<\/p>\n A number of YFI proponents were pleased with the outcome as one person tweeted<\/a>:<\/p>\n yETH vault is full – $139 million added to YFI’s TVL in less than 2 days. These are long-term holdings with a 0.5% withdrawal fees, not your yield farming money that comes and goes. I genuinely have not seen a crypto product with a better product-market fit.<\/strong><\/em><\/p>\n<\/blockquote>\n Despite the high anticipation for the Yearn Finance vault feature and the $139 million deposited, some people think it is risky.<\/p>\n Other individuals also asked theoretical questions<\/a> like: “Could a whale crash ETH<\/a> price, clog blocks so yVault CDP [transactions] cannot get through, then liquidate the (collateralized debt position) CDP?”<\/p>\n The price of ETH<\/a> tumbled over 7% on Thursday<\/a>, but market carnage like March 12 (Black Thursday) possibly could wreak far more havoc on such systems.<\/p>\n The Maker DAO team dealt with these very problems of uncollateralized DAI and liquidations<\/a> on Black Thursday. However, the Yearn Finance vault smart contract is claimed to be insured and audited and the CDP is 2x collateralized as well.<\/p>\n Only a black swan market rout will be able to test whether or not Yearn’s ethereum liquidity vault strategy is strong enough.<\/p>\n What do you think about the $139 million deposited into the Yearn vault and the 90% APY? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n The post Yearn Finance Vault Users Lock $139M: Farmers Claim Collateralized ETH Gathers 90% APY<\/a> appeared first on Bitcoin News<\/a>.<\/p>\n![\"Yearn](\"https:\/\/www.cryptocabaret.com\/wp-content\/uploads\/2020\/09\/yearn90.jpg\" "\\"Yearn")
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