DeFi giant Yearn Finance continues to grow and develop new products. Its latest offering is StableCredit, a new protocol for decentralized lending, stablecoins, and automated market makers. Meanwhile, its native YFI token got a huge boost from being listed on Coinbase Pro.
DeFi aggregator Yearn Finance has launched another protocol that combines tokenized debt stable coins, lending, and automated market makers (AMMs). It allows users to provide any asset and create tokenized credit called StableCredit in USD or other fiat bases such as EUR and JPY.
Since its launch in August, Yearn Finance has continued to innovate in the DeFi sector, bringing new yield farming opportunities and liquidity pools to the marketplace. In that short space of time, it has been propelled to the fifth-largest DeFi platform in terms of crypto collateral lockup.
Introducing StableCredit, a new protocol for decentralized lending, stablecoins, and AMMs. https://t.co/Cuoo2OMi5H
— yearn.finance (@iearnfinance) September 10, 2020
Yearn Finance Offers StableCredit for AMMs
The process works by providing USDC, the exact value of which is determined by a price oracle, and allowing the protocol to mint the dollar value of ‘StableCredit USD.’
The USDC and StableCredit USD are then entered in equal amounts into the AMM whereby the protocol calculates the system utilization ratio of up to a maximum of 75%. The utilization ratio value of the supplied USDC is then minted as StableCredit USD which can be used as lending credit to buy or borrow other assets.
DAI is tokenized debt. You provide ETH into a Maker vault. This gives you a credit line of ETH in dollar value. You can draw up to 75% of this credit line in DAI (debt). Anything over, and you will be liquidated.
While it sounds a little convoluted, as many of the replies to the tweet confirmed, the mechanism introduces another layer of stability into decentralized borrowing and lending markets by using fiat-pegged assets priced using oracles. It also eliminates the need to use a crypto asset such as Ethereum as the ‘go-between’ with token swapping, while maintaining liquidity pool structure.
YFI Surges on Coinbase Pro Listing
Yearn Finance’s native YFI token has moved back into bullish territory following a correction from its all-time high of $39,540 on Aug 31. A Coinbase Pro listing has propelled the token from a low of around $27,000 on Sept 10, to top out at just above $35,000 the same day.
A minor correction had begun during the Sept 11 morning trading session which took the token back to the $32,500 level.
The announcement stated that YFI deposits would begin on Sept 14, when the YFI/USD order book will enter transfer-only mode. If there is enough liquidity, full trading will be enabled on Sept 15.
On Monday September 14, our YFI-USD order book will enter transfer-only mode, accepting inbound transfers in supported regions. Orders cannot be placed or filled. Trading will begin on or after 9AM (PT) Tuesday Sept 15, if liquidity conditions are met. https://t.co/6UTHK3Htpf
— Coinbase Pro (@CoinbasePro) September 10, 2020
Coinbase Pro has added a number of other DeFi tokens to its platform recently including UMA (UMA), Celo (CGLD), Numeraire (NMR), Band (BAND), Compound (COMP), Maker (MKR), and the Layer 2 OMG Network.
The announcement added that YFI is not yet available on the primary Coinbase platform or via the firm’s consumer mobile apps.
yETH Vaults Liquidity Stable, DeFi Markets Rebounding
According to the Yearn Finance stats dashboard, the amount of ETH locked in its yETH vault has stabilized at around 220,000. At today’s prices that equates to just under $80 million.
From huge returns of almost 100% APY when the vaults were launched, earnings have diminished to just over 25% at the present. There have been a few rebalances when ETH prices crashed earlier this month in order to repay debts and keep the system stable.
Despite the drop in earnings, these yETH vaults provide a good way for ETH holders to get decent returns without taking any action since the entire process is automated. Simply depositing Ethereum into the vault is all that needs to be done.
In terms of DeFi as a whole, the amount of ETH collateral across all protocols has rebounded to 5.5 million. This represents almost 5% of the entire supply and is an increase of over 100% in the past two months according to DeFi Pulse.
The total value locked (TVL) of all DeFi markets is recovering today with a return to $7.8 billion. Uniswap is largely responsible for this as its collateral surges again, rebounding from the SushiSwap drain this week. Uniswap TVL has topped $800 million and propelled the protocol back into fifth place, just behind Yearn Finance.