Yearn Finance’s Impressive Q1 Earnings
The decentralized finance (DeFi) yield aggregator, Yearn Finance, has dropped its financial report for the first quarter, and let’s just say, they aren’t short on good news! The platform raked in a whopping $4.88 million in earnings, as revealed in their official report published on GitHub on April 27.
The Comparative Wealth
To put things in perspective, this quarter’s earnings alone eclipsed the total revenue of the previous six months (which was $3.7 million). March, in particular, was exceptional for Yearn, bringing in $3.16 million, nearly matching the earnings it garnered in all of 2020. Sure, it wasn’t exactly ‘easy street’ for each month; January and February weren’t quite the rockstars, earning $528K and $1.19 million, respectively.
The Vaults are the Stars
The report also spotlighted the yVault product line, which remains the critical engine driving Yearn’s revenue. These vaults employ advanced strategies to capitalize on the best yield farming opportunities available by effortlessly staking on other protocols. With the recent launch of version 2 vaults, the top-line revenue experienced a much-needed boost.
New Vaults Galore
During the first quarter, Yearn launched 36 new yVaults, which included five brand spankin’ new version 2 vaults. The standout performer? Drumroll, please… the y3CRV vault, built from three stablecoins (USDT, USDC, and DAI), generated a delightful $1.1 million in revenue for the quarter. Considering their previous reliance on the yUSD vault for revenue, you could say this is quite a shift!
Fees: A Transition to V2
Yearn’s initial profits came mainly from withdrawal fees on v1 vaults, which took 0.5% when collateral was withdrawn. However, with the v2 vaults now in play, the fee structure has transformed. Instead of withdrawal fees, users pay a 2% management fee, plus performance fees that can peak at 20%. This new approach advocates for a win-win scenario where users shell out fees only on the vaults performing the best.
A New Strategy for Treasury Assets
In late February, Yearn ventured into yield farming treasury assets, which proved to be fruitful as new revenue streams emerged. A committee was formed to yield on idle assets held in their treasury by leveraging capital from CDPs (collateralized debt positions) on other DeFi platforms like MakerDAO.
Looking Ahead
“yVault revenue was the key driver of adjusted EBITDA,” Yearn reported. But hold on to your hats, because they anticipate that treasury yield farming will be an increasingly significant contributor to revenue moving forward. As we look at the numbers, the total value locked on the protocol is just over $3 billion, according to DappRadar. Talk about a bullish outlook!
+ There are no comments
Add yours