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Yearn Finance price almost hit $ 70,000, what’s driving the YFI bulls?

Traders have flocked to Yearn Finance’s YFI markets, as their profit opportunities on other top tokens dwindle.

A lackluster cryptocurrency market did little to offset Yearn Finance’s bullish bias, as the price of its governance token, YFI, hit new all-time highs in USD terms on May 11, just shy of $ 70,000.

YFI price hits new USD highs

The YFI / USD exchange rate added $ 6,258, or 10.02%, to hit $ 68,748 before the London opening bell. The pair quickly suffered a bearish pullback when traders decided to finalize their gains, reaching roughly $ 67,067 at 0736 UTC. However, the decline appeared marginal compared to the prevailing uptrend, suggesting that YFI could continue its bullish momentum after a short-term period of consolidation.

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The token performed equally well against Bitcoin (BTC), the flagship cryptocurrency whose own uptrend slowed after hitting a milestone of roughly $ 65,000 last month. On Tuesday morning, the YFI / BTC pair’s exchange rate was close to its five-month high of 1,192 BTC. Meanwhile, at its intraday peak, the pair’s bid was 1,247 BTC, an increase of 58%.

Massive bullish movements in the Yearn Finance token market appeared as its main rivals underperformed much. At first, Bitcoin continued to show weakness after failing to register a breakout above a psychological resistance level of $ 60,000. Their strong positive correlation with other major digital assets also drove their prices down.

For example, Ether (ETH), the second-largest cryptocurrency by market capitalization, plunged below $ 4,000 due to profit-taking sentiment.

Meanwhile, the biggest losers within a tight 24-hour window were Dogecoin (DOGE), XRP, Polkadot (DOT), and Litecoin (LTC). Each fell within the range of 9% to 12%, again due to traders’ inclination to withdraw profits after supersonic token price rallies in previous sessions.

Yearn Finance’s YFI was comparatively weaker so far in 2021. The token would rise nearly 160% compared to the thousands of bullish profit percentages of its altcoin pairs. For example, Dogecoin remained a scene stealer for most of the first and second quarters, rising by more than 19,000% to eventually outshine other large-cap altcoins.

Technically, YFI served as a hedge as the rest of the crypto market returned from its overbought levels. But looking closely, what worked in the Yearn Finance token’s favor, at least in the current quarter, is its ability to sidestep a number of its main issues.

Banking infrastructure for DeFi

In retrospect, Yearn got off to a rocky start to 2021. His main problem going into the year was a funding gap. The Yearn Finance group did not have reserves for its main contributors, which limited it to obtaining bullish exposure. Andre Cronje, the creator of the Yearn Finance protocol, even shared his frustration by writing a blog titled «Building on DeFi Sucks.»

However, the following weeks saw a great deal of community involvement in solving the reserves problem. YFI holders presented two proposals and approved them by democratic vote. The first «Buyback and Build» update helped introduce a buyback program that added YFI to its treasury for redeployment.

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Meanwhile, the second proposal «Funding Yearn’s Future» minted 6,666 new YFI tokens to create the protocol treasury, with a primary focus on funding from major contributors.

The next big update came in the form of Yearn V2. Its mid-January release received negative reviews due to user interface issues. But the team responded promptly to address those concerns to a successful conclusion. In the months after the correction, the total value locked within the Yearn Finance group has risen to $ 4.243 billion.

The most notable changes that Yearn V2 brought to the Yearn Finance protocol included a new fee structure, multi-strategy vaults, and highly differentiated strategies with the help of a new ecosystem partnership with Cream. YFI prices responded optimistically to the events.

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Frax Finance, a fractional algorithmic stablecoin protocol, has added its fixed yield asset FXB to the Yearn vaults. Meanwhile, Alchemix is ​​also building a credit system on top of its protocol, confirming that Yearn is becoming a banking alternative to the decentralized financial ecosystem.

Absolutely epic H6 close on $YFI, no other bnf futes showing this degree of rel strength at the moment, and $YFIBTC looking primed for continuation. pic.twitter.com/hutUBRONuJ — cuban (@cubantobacco) May 11, 2021

The YFI rally takes its long-term bullish signals from such growth prospects.

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