A new governance token in decentralized finance (DeFi) is captivating yield farmers’ attention. Its creator didn’t set aside any of the tokens for himself and he insists the new token has no monetary value.
Still, that hasn’t stopped it from trading as high as $2,374 a pop, according to CoinGecko.
YFI is the governance token for Yearn.Finance, a site that performs a variety of functions for DeFi users, moving their assets in and out of different liquidity pools in order to find the best yields. Its name may also be a reference to an unflattering internet acronym.
Read more: What Is Yield Farming? The Rocket Fuel of DeFi, Explained
“Each of these systems have control mechanisms, configurable fees, maintenance controls, and rules that can be modified. Thus far, these have been managed by us,” Yearn’s creator, Andre Cronje, wrote in a Medium post. “In further efforts to give up this control (mostly because we are lazy and don’t want to do it) we have released YFI, a completely valueless 0 supply token.”
Cronje did not respond to a request for comment from CoinDesk.
“Earning YFI is simple, provide liquidity to one of the platforms above, stake the output tokens in the distribution contracts (we will provide an interface for this), and you will earn a (governance controlled) amount per day,” Cronje wrote.
Yearn was able to largely reuse the code Synthetix used to deploy a similar liquidity incentive on Curve, Cronje explained on Twitter.
Users who deposit liquidity in Yearn pools will get yTokens, accounting for their deposits. These are what DeFi’s itinerant farmhands stake to earn YFI. A significant portion of this action is occurring on Curve, the automated market maker (AMM) that first rose to prominence following the debut of Compound’s COMP governance token.
Read more: COMP’s Sudden Growth Has Swamped a DEX Dealing Only in Stablecoins
Curve hit another all-time high in terms of pair volume on July 19, this time driven by YFI mania.
“Since YFI had no investors and ALL tokens are going to liquidity providers, everyone become very crazy about it, and it all exploded,” Curve founder Michael Egorov told CoinDesk in an email.