Yearn’s YFI token is up almost 25% over the last 24 hours despite a more general market pullback.
- Yearn’s YFI token is up almost 25% on the day and over 100% on 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 passed but seems to have had some effect on the market.
Yearn.Finance token holders have been enjoying strong price appreciation this week, with the YFI token up almost 25% today alone.
Yearn Surges Amid General Market Downturn
Yearn.Finance (YFI), a DeFi aggregator with over $5.5 billion in total value locked, is up 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 roughly 100% over the last week.
In May, YFI reached prices of over $82,700 per token, but was trading as low as $19,594 as recently as Dec. 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 concerning key 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 completed sequentially, to amend the tokenomics of the YFI token:
- First, a portion of YFI tokens would be bought back by Yearn’s Treasury and distributed as rewards to YFI holders who are actively involved in Yearn Governance.
- Second, four different methods by which YFI holders could be rewarded for locking up their tokens are introduced.
- Third, the proposal would grant Yearn Developers the ability to roll out these new features as they see fit.
- Fourth and finally, the proposal introduces a restriction on Yearn Governance: only YFI staked in xYFI (beginning in Phase 1) and/or locked (as per Phase 2 and onwards) would be eligible for use in voting.
With EIP-1559’s massive ETH burn creating some excitement around a supply shock and other protocols like Polygon following suit, it is possible that Yearn holders are banking on increasing token scarcity (resulting from lockups) if the components of this major governance proposal are passed and implemented.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
Disclosure: Andre Cronje, founder of Yearn.Finance, is an equity holder in Crypto Briefing.
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