Yearn Finance Recap 2023 - The Year of DeFi Clarity

February 9, 2023 - I wrote an article about yearn being the sleeping giant in the market, as of today, yearn has rallied almost 40% since that initial analysis.

$YFI as we know has a supply of 36,000 tokens, and most recently the protocol has been in the headlines for it's efforts to support liquid staking for ETH, and as always many DeFi products shall remain undervalued until regulations are figured out, my analysis for how high yearn could go is beyond absurd, but that could be said for many tokens in the industry once there's clear language on what regulations mean in the capital markets around the world, but exactly what does it mean?

Upon doing some simple research I have concluded that tokens like $YFI and $COMP share market cap valuations favorable to web 2 companies like Vimeo, while $AVAX market cap hovers to the likes of GitLab, upon doing research in the capital markets and the crypto currency industry, it's fair to say many real world companies/digital products have shared the pains of FUD, with market caps falling 70-80% on years end. This year will tell us more about the protocols and their churn rates among communities, so far many rollup chains have seen an enormous amount of support from crypto communities around the world.

$BTC has seen an influx of deposits since the fall of SVB, while many venture backed crypto projects continue to land funding, all of this is surprisingly more robust than anticipated, this is primarily for two reasons, DeFi protocols have revenue streams, and some are doing really well, this leaves room to incentivize pools for earning.

Bitcoin works well for enterprises and hedges for storing digital wealth, the drawbacks of losses is entirely smaller than losing it all from financial holdings in the physical form.

For now it's a guessing game how tokens will perform in the near future, but the long term looks bright especially for Ethereum, and the protocols running on it, the technologies can only get better from here and become more sustainable.