Yearn.finance (YFI) has faced a strong rejection in the past 24 hours. The leading cryptocurrency, based on Ethereum, has shed 17% in the past 24 hours. This makes it the worst performer in the top 100 cryptocurrencies, strongly underperforming Bitcoin’s 0.5% gain in the past 24 hours.
The strong drop in the decentralized finance-focused coin comes amid a strong drop in the yields that users of Yearn.finance’s Vault products can make. The yields are partially responsible for the drop as high yields allow holders of YFI to obtain more fees from user deposits.
While YFI may be under pressure in the short term, analysts are still optimistic about the project’s long-term prospects.
Yearn.finance (YFI) Drops 17%, Making It the Worst Performer in Top 100
Yearn.finance is down 17% in the past 24 hours, with the price of the leading DeFi coin reaching $17,000 for the first time in many weeks. In fact, the coin is currently trading at lows not seen since late August, just a few days prior to the strong early-September correction.
YFI’s performance makes it the worst performer in the top 100 cryptocurrencies as aforementioned.
The coin is but one of many DeFi coins that have bled lower in the past 24 hours. SushiSwap’s SUSHI is down 13.8% while UMA, Solana, Band Protocol, Uniswap, and others have all shed 5-10% in the past day.
Chart of YFI's price action over the past day from TradingView.com
Long-Term Outlook Still Strong
Analysts remain optimistic about YFI’s long-term outlook despite this extremely harrowing price performance in the near term.
Lou Kerner, a partner at CryptoOracle, recently commented on YFI’s long-term outlook:
“Yearn is so impressive because it takes the massive opportunity and remarkable complexity of DeFi, makes it simple to use, while deeply integrating with leading DeFi protocols (e.g. Uniswap & Curve), and leveraging community as a powerful moat.”
This optimism has been echoed by others like Andrew Kang of Mechanism Capital. The crypto-asset fund recently released a report in which it determined that over the long haul, YFI should end up trading at a price an order of magnitude higher than it is now.
“Our bullish DCF case yields prices of $241k and $315k, depending on whether a performance fee is applied to yToken revenue. A TVL of over $150 billion by the end of 2024 is certainly aggressive — that’s almost 3x the current market cap of ETH! — but given the growth of stablecoins & vaults that we have already witnessed and the fact that we have only implemented a fraction of potential strategies that are planned we do not believe that this scenario is out of the question. We also don’t want to forget that tokenized real world assets are beginning to enter DeFi.”
Kang recently elaborated that Yearn.finance’s utilization of other yield-farming strategies should drive protocol revenue much higher.
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Featured Image from Shutterstock Price tags: Yfiusd, yfibtc Charts from TradingView.com Photo by Stijn te Strake on Unsplash