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Despite resilience in the price of Bitcoin, it’s been another brutal day for Yearn.finance (YFI) and other DeFi coins. The leading decentralized finance coin, based on Ethereum, has dropped 10% in the past 24 hours.
The cryptocurrency currently trades for $20,900, far below its all-time high at $44,000. YFI’s decline comes as other DeFi coins have undergone strong pullbacks of 5-15%, underperforming Bitcoin, Ethereum, and most altcoins.
Yearn.finance’s decline comes in spite of positive fundamental trends for the project and all of the DeFi space.
Yearn.finance is a decentralized finance protocol focused on allowing users to obtain the highest returns on their deposits of cryptocurrency. It is also expanding into a number of other market segments including decentralized lending, decentralized exchange, and decentralized insurance.
Reason #1: Yearn.finance Fundamental Developments
There have been a number of positive announcements and developments for the cryptocurrency and its respective ecosystem.
Yearn.finance’s main product lineup, Vaults, has been undergoing upgrades over recent weeks. yBTC, yETH v2, and other investment strategies are being rolled out, drawing in a large amount of capital from investors looking to make a profit on their investments.
Coming up in the weeks ahead, there are positive announcements.
First and foremost, there is some movement on getting YFI added as a collateral type for the MakerDAO ecosystem. This will be a mutually beneficial addition that will allow MakerDAO to gain collateral and will give YFI more of a utility.
And secondly, developers are working on upgrades to the Yearn.finance site that should help to improve usability.
https://twitter.com/FUTURE_FUND_/status/1311165012082384897
Reason #2: All of DeFi Is on a Path of Growth
Further boosting the Yearn.finance protocol and its underlying cryptocurrency, all of DeFi is currently on a path of growth.
Spencer Noon, head of DTC Capital, recently commented on the path of all of DeFi:
“The strong fundamental backdrop to #crypto — which is unlike any bull market previously — is that there are billions of cryptodollars coming on-chain to use #DeFi. Unless that shows signs of slowing, we are on track for a multi-trillion dollar aggregate marketcap for the space.”
The strong fundamental backdrop to #crypto — which is unlike any bull market previously — is that there are billions of cryptodollars coming on-chain to use #DeFi. Unless that shows signs of slowing, we are on track for a multi-trillion dollar aggregate marketcap for the space.
— Spencer Noon (@spencernoon) September 26, 2020
There are other trends such as positive developmental trends and the introduction of scaling solutions that are likely to boon DeFi even further.
Yearn.finance stands to benefit from this because it is seen by many as an index play on DeFi.
Featured Image from Shutterstock Price tags: yfiusd, yfibtc Charts from TradingView.com Yearn.finance (YFI) Drops 10% Despite These 2 Fundamental Trends
