How to buy Yearn Finance online
This introductory guide explains what Yearn Finance is and the benefits of holding its YFI token. Inside you can learn where to buy YFI coins, how to trade them, and whether to invest in Yearn Finance for the long term.
Compare where to buy Yearn Finance, and open an account
If you want to buy Yearn Finance right away, simply follow any of the links below to visit a reliable broker and get trading. If you want to know more before making a decision, you can keep reading to learn more about Yearn.
What is Yearn Finance?
Yearn Finance is a decentralised finance portal where users earn money by investing their crypto assets. The YFI coin is the cryptocurrency that powers the Yearn Finance platform. Yearn Finance pays out a portion of its fees to YFI holders as a dividend, and they can also vote on platform governance.
Yearn Finance is a gateway for people who want to hold their cryptocurrency and earn interest, but don’t want to have to work out the best place to invest it themselves. Instead, they can deposit their crypto on Yearn Finance and the platform automatically works out where to find the best returns. Every time this happens it generates a fee, which is what funds the dividends YFI holders receive.
To extend its capabilities as an investment portal, Yearn Finance has merged with a number of other platforms in the decentralised finance space. This means that it’s opening up more advanced investment strategies to a wider audience.
How does Yearn Finance work?
Yearn Finance works out the best way to invest cryptocurrencies to generate the highest yield. When a user deposits funds into Yearn Finance, the coins are pooled together and distributed between reputable crypto lenders, like Aave, Compound, and DyDx, in order to generate the highest return. Yearn moves deposits around between different lenders in order to produce the best results, a practice known as ‘yield farming’.
The Yearn Finance token is used for governance of the Yearn platform and to earn fees from every transaction. There is a limited supply of YFI coins – only 30,000 – and they were exclusively distributed to the Yearn Finance community before being made available to trade on exchanges in August 2020. Because its investment strategy had generated a significant amount of value before the tokens were distributed, the YFI/USD price almost immediately surged above $30,000.
How to buy YFI online – a step-by-step guide
Step 1. Find an exchange to buy YFI
You can buy Yearn Finance from most online crypto exchanges. You’ll need to go to an exchange and transfer your cash into a cryptocurrency that you can then use to buy YFI. You can learn more about how to do so in our guide to buying cryptocurrency.
If you want to know where to buy Yearn Finance now, here are two of the top exchanges that offer YFI:
- Binance: One of the biggest names in the cryptocurrency trading space, Binance allows users to trade hundreds of different cryptocurrencies, including YFI. Open a Binance account now >
- Bitpanda: A simple exchange to help you buy and sell a wide range of cryptocurrencies, including YFI, using several fiat currency options if you are a user operating from the EU (and the UK). Open a Bitpanda account today >
Step 2. Sign up and fund your account
It’s common when using cryptocurrency exchanges to have to sign up for an account before you can fund your trades. This usually involves a level of identity verification that varies from platform to platform but can mean providing a copy of a photo ID.
These days, most exchanges accept deposits in fiat currency, although some still can only be funded with cryptocurrency. To buy YFI, you’ll need to buy Bitcoin, or another cryptocurrency, first. If you use one of our recommended exchanges, you can transfer your fiat currency into crypto, then use that cryptocurrency to buy YFI.
Step 3. Buy Yearn Finance
Once you have set up and funded your exchange account, you’ll be able to exchange the cryptocurrency in your account for YFI. If you have loaded your account with Bitcoin then you will want to head to the exchange and look at the current price of Yearn Finance in the YFI/BTC crypto pair and execute your trade.
Step 4. (Optional) Get a suitable wallet
For added security, you can get your own wallet and transfer your YFI into it for safekeeping. You don’t have to do this, and most exchanges will allow you to hold your coins within your account. The only real reason to consider this is if you’re planning on buying and holding a large amount of YFI coins for the long term.
Here are some wallets you can use to store your coins:
- KeepKey: KeepKey is a hardware wallet that stores your cryptocurrency offline. Hardware wallets are especially secure as your personal key never even comes into contact with the internet. Sign up for KeepKey today >
- CoolWallet: Another hardware wallet, CoolWallet is designed to appeal to smartphone users and can store your coins in an offline app instead. You can manage your account using a bluetooth connection. Join CoolWallet now >
How to trade Yearn Finance- a step-by-step guide
Step 1. Find a broker
Make sure any broker you choose is able to support YFI trading. If you’re looking to trade YFI instead of buying and holding it for the long term, then you need to find a reliable broker that can execute your trades. Because all the available YFI is already distributed, you can only buy it on an exchange at the moment.
The top brokers let you trade cryptocurrencies, and many also offer assets like stocks, forex, and commodities that you can trade as well. eToro is one of the biggest brokers you can sign up with. Plus500 is another
Step 2. Deposit money
Brokers usually let you deposit fiat currency (for example GBP, EUR, and USD) and use that to buy crypto. Remember to take into account the trading fees each broker charges on every trade, so you can get the best value for your money.
Step 3. Decide how you’d like to trade
Two ways of trading with an online broker are spread betting and contracts for difference (CFDs). Our online courses explain what each of these strategies involves so you can decide which one is best for you.
Step 4. Start trading
When your broker account is set up, you can start trading. Beginners should consider starting out with a demo account to learn how to trade cryptocurrency without the risk of losing money.
It’s always best to take time to think over any potential investment, and this is especially true when it comes to cryptocurrency. Here are some pros and cons to consider when it comes to investing in YFI, along with some key questions to think about below.
- You can earn dividends on YFI coins by holding them for the long term
- YFI is backed by a popular decentralised finance system that carries inherent value
- YFI has been known to see big spikes in value, creating short term trading opportunities
- The YFI coin’s limited supply and generally high price makes it an expensive investment
- YFI’s combination of high price and volatile swings might scare off new buyers
To help you decide whether to buy YFI tokens, we’ve come up with a few more questions. Read on to find out a little bit more before you invest in Yearn Finance.
1. Is it a good time to buy Yearn Finance?
Whether YFI is a good investment depends on what you want to achieve. If you want to use the YFI token to participate in the Yearn community, then it’s almost always going to be a good time to buy. Similarly, if you want to use Yearn Finance to invest some of your other crypto assets, then buying YFI gives you the opportunity to have a vote and a say over its direction and investment strategies.
Yearn’s high price over much of its short trading life has meant it’s not the most realistic option, particularly for new crypto investors. Its volatility could offer trading opportunities, however, as it has been known to soar and then collapse in price over a very short period of time. After opening under $1000 in July 2020, it was over $34,000 in September, then halved in value in the space of ten days. You can track the latest price movements with our market analysis below:
2. What problem does YFI solve, and what are the coin’s investment prospects?
Yearn Finance automates the process of working out where’s the best place to invest your cryptocurrency. It’s a gateway to decentralised finance with a range of services that offer different investment strategies depending on your experience and level of risk tolerance.
YFI’s investment prospects depend on the success of the platform and the continued restriction of the YFI supply. In its early history, the YFI token traded at a very high price – it surged even higher than Bitcoin within six weeks of listing – but its limited total supply makes it volatile. The community has the power to mint more coins at any time if a majority votes in favour.
While increased supply might stabilise the price, it would also cause it to fall and the politics of the Yearn Finance system are unpredictable. One of the most important things to keep track of is whether the community does decide to release more tokens. Any action on this front could have serious implications if you own YFI coins. You can follow that and all the latest Yearn Finance news below:
Do you want to hold YFI for the long term?
If you think Yearn Finance is going to be a success or simply think that the continued low supply of YFI coins makes them a good investment, it could be worth holding onto them for a long time. It also depends on whether you can afford to have that much money locked up for a long period. With so few coins in circulation, one big holder selling out can put a lot of pressure on the price. So if you do decide to invest for the long-term, you should be aware that you will probably have to ride out some lows along the way.
Considerations for a long term investment strategy
If you believe in the YFI system, want to participate in its governance, or simply think it’s only destined to go up in value, then you’ll want to sign up with a reliable cryptocurrency exchange and buy some coins. If you plan to hold the coins for a long time and don’t intend to use them for anything else, you might consider getting a wallet to store your coins.
Considerations for a short term trading strategy
YFI’s volatility could offer opportunities for short-term traders who are looking to benefit from trends in the crypto market. In that case, the overall strength and long-term potential of the coin’s price is less important. To succeed at short-term trading you should make sure you understand technical analysis and sign up with a broker that offers low trading fees. Using charts and indicators to anticipate price movements gives you the best chance of making money out of short-term trading.