DeFi platform Curve locked over $300 million in assets amid the yEarn YFI mining craze.

The decentralized stablecoin trading protocol Curve has seen its total locked assets increase by over $250 million in the past week, making it the fifth-ranked DeFi protocol in terms of total locked value. This growth is closely related to the recent launch of liquidity mining by yEarn, shedding light on the mystery behind yEarn and YFI.

Curve Platform's Collateral Assets Surging

Since the craze for liquidity mining on the decentralized lending platform Compound, the total value of assets locked in DeFi platforms has repeatedly hit new highs. According to data from DeFi Pulse, the current total value of assets locked in DeFi platforms has reached $33.6 billion.

The platform that has experienced the fastest growth recently is the decentralized stablecoin trading protocol Curve. Since July 18th, the total value of assets locked in the smart contracts of the platform has increased by over $250 million, making it the fifth-ranked DeFi protocol in terms of total locked value.

The main reason driving the surge in assets on the Curve platform is the recent liquidity mining initiative launched by yEarn. Participation in yEarn's liquidity mining allows users to earn the platform's governance token YFI. Before participating in yEarn's liquidity mining, miners must first complete the step of "collateralizing stablecoins on the Curve platform to exchange for yTOKEN," leading to a significant increase in the locked assets on Curve.fi in a short period of time.

yEarn's liquidity mining can be said to be the most profitable to date, while also being the most complex and having the highest entry threshold among liquidity mining mechanisms.

The Rapid Rise of Curve and yEarn

Curve was launched in January 2020, allowing users to freely convert various stablecoins and multiple versions of Bitcoin. In simple terms, it can be seen as a "Uniswap that only supports stablecoins and ERC20 versions of Bitcoin." yEarn is the V2 version of iEarn. When users transfer assets to the V1 iEarn contract address, the protocol automatically allocates lending liquidity among DeFi protocols such as Aave, dYdX, and Compound to maximize "lending returns," similar to bond funds in traditional finance.

yEarn has further realized "maximizing liquidity mining returns" based on iEarn. In simple terms, yEarn allows users to mine YFI while also mining CRV (Curve's unreleased governance token), BAL (Balancer's governance token), and earn trading fees and interest income from multiple protocols simultaneously.

Before the release of the YFI governance token, Curve had less than $100 million in assets locked in the protocol, and at the time of writing this article, locked assets have exceeded $330 million.

Bitcoin in the DeFi Space

The reason why the governance token YFI has gained such popularity in the market is mainly due to yEarn's nearly fully decentralized governance model and token economy. YFI tokens were not pre-sold, pre-mined, and even the main developer Andre Cronje did not keep any tokens for himself. Similar to Bitcoin, everyone can only obtain tokens through mining.

In addition, the community, like Bitcoin, has a high level of control over yEarn's future. The future development of the protocol will be entirely decided by the community. For example, the total supply limit of YFI is currently 30,000 tokens, but the smart contract is not set in stone, so the community can freely decide whether to mint more YFI tokens and how to do so (yesterday, the community passed a governance proposal allowing the protocol to mint more YFI tokens in the future).

It is worth mentioning that in addition to decentralizing the "governance decision-making power," yEarn has also decentralized the "governance execution power." Through the principle of multi-signature, developer Andre Cronje split the administrator keys into 9 parts and handed them all to other major community participants. In other words, Andre Cronje has given up the right to change the protocol himself, realizing the true decentralization of yEarn.

The development team emphasizes that yEarn is still in its early stages, with a high level of risk involved, and the main developer Andre Cronje has also said that the value of the YFI token itself is 0 (possibly to avoid regulatory risk?). However, despite this, the market price of the YFI token was still $1,175 at the time of writing this article, and many KOLs both domestically and internationally believe that the token price is likely to rise to the same level as Bitcoin. Whether YFI can create miracles, let us witness together.