Ethereum’s DeFi: Yearn Finance’s vaults v2 could offer yields up to 50%

  • The annualized profit for the new vaults v2 for Ethereum’s DeFi protocol Yearn Finance could reach over 50%.
  • Yearn Finance’s partnership with SushiSwap offers an alternative to mitigate “impermanent loss” in automated market makers.

Andre Cronje’s products are known to create a huge hype in the crypto community. The Yearn Finance protocol was among the biggest winners in Ethereum’s DeFi ecosystem in 2020 for being accessible to users and offering good profit opportunities. The second iteration of the protocol will come with an enhanced version of its most popular product, the vaults.

Conceived as an ecosystem in which users can access different strategies to optimize their profits, Yearn Finance aims to facilitate yield farming. However, Cronje explained earlier that yield farming is becoming “more and more complex”.

Therefore, the Yearn Finance vaults in the second iteration will operate with other platforms to optimize the return of deposited funds. Cronje shared an image suggesting that the annualized profits (APY) in the new version of Yearn Finance will have returns of up to 55% for some deposited tokens.


As shown in the image above, of the tokens deposited in the vault the Wrapped Ethereum Maker offers the lowest earnings with 1.9%, followed by the USDC/IDLE pair with 14%. The community has responded to the image with great enthusiasm. Some users consider the launch of the new vaults to be “massive”.

As a sign of the hype in the community for the launch of the new iteration of Yearn Finance, IDLE price has skyrocketed. In the last 24 hours, IDLE has made a profit of 48.46% and is trading at $4.92 after a week of losses that were about 17% at the time of publication.

Yearn Finance expansion and SUSHI partnership

The community has also been receptive to the partnerships that Yearn Finance has been able to obtain in recent months. From Pickle, C.R.E.A.M., Alpha Homora (v2), Cover, among others, Yearn Finance is preparing to offer products that operate with different platforms and leverage. Cronje stated:

With Cream v2 (Iron Bank), Alpha Homora v2, and Yearn v2, all vaults become leveraged vaults, and cross asset strategies become viable (…) These cross-platform strategies allow up to 90x leverage on stable coins and 80x leverage.

The partnership between SushiSwap and Yearn Finance has also been celebrated in the community. Cronje claims that the cooperation will allow them to offer a viable alternative to mitigate “impermanent loss”, one of the problems faced by liquidity providers for automated market makers such as Sushi and Uniswap.

The creator of Yearn Finance proposes to tie the trading pairs to the price of a “transfer token”. This would reduce the impermanent loss for periods of increased market volatility. Although it would not be completely eliminated, the introduction of this product could give Sushi a significant advantage over Uniswap and make it a more attractive protocol for liquidity providers, as Cronje clarified:

While we are very happy and excited with the early results of sil, there are still lots of further reviews required, as such we will not be making available a public UI in the near future and leave the interaction to advanced users that are able to identify and interact with the sil contract themselves.

About Author


Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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