How to Buy Yearn.Finance (YFI) in the UK (2022)

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Where’s the cheapest place to buy Yearn.Finance (YFI) in the UK?

In 2022, there are more places than ever before where UK residents can buy cryptocurrencies like this.

Check out this short post for a list of some places where you can get your hands on it.

Best Ways to Buy Yearn.Finance (YFI)

1. Coinbase Pro

Instructions to limit buy bitcoin (BTC) on Coinbase Pro (Step 1)

You can’t buy Yearn.Finance (YFI) directly with GBP on Coinbase Pro, but it’s still a low-cost method of buying it if you’re living in the UK.

This means you’ll have to:

  • Deposit GBP with a UK bank transfer (FREE).
  • Buy Bitcoin (BTC) with GBP (real exchange rate, max 0.5% fees).
  • Buy Yearn.Finance (YFI) with Bitcoin (BTC) (real exchange rate, max 0.5% fees).

It’s a little bit extra faff, but also means you’ll pay up to about 1% in fees to go from GBP into Yearn.Finance (YFI) on Coinbase Pro.

Like other crypto exchanges, the downside of Coinbase Pro is that it might be a little intimidating to use as a complete beginner.

Check out the Coinbase website, or my in-depth Coinbase Pro review, to learn more about them.

2. CoinJar

CoinJar allows UK residents to directly buy Yearn.Finance with GBP.

There’s no messing around involved. Just deposit GBP with a simple UK bank transfer (FREE) and then use it to buy Yearn.Finance (YFI) and any other supported cryptocurrency.

You’ll be charged a fixed fee of 1% when you buy Yearn.Finance on CoinJar. I’ve also found that the exchange rate you’re quoted is a little higher than you can find elsewhere. This varies day-to-day, but I’ve found that the prices you’re quoted for Yearn.Finance aren’t usually more than 0.5% above what you’d find elsewhere.

In contrast to Coinbase Pro, CoinJar is a lot easier to use and beginner-friendly (the mobile app is great).

Check out my CoinJar review or their website to learn more.

What is Yearn.Finance (YFI)?

Yearn.Finance (YFI) is the governance and rewards token for the Yearn.Finance ecosystem. Technically, the token is called YFI and the ecosystem is called Yearn.Finance, but many people use these terms interchangeably.

Formerly known as iEarn, Yearn.Finance was founded in 2020 by Andre Cronje, the self-professed “father of DeFi”. The primary purpose of Yearn.Finance is to serve as a decentralised yield aggregator. It uses smart contracts to automatically move any funds that you deposit between different lending protocols to maximise your interest yield.

There are many ways to use Yearn.Finance. But the key advantage of the protocol is that it gives investors a tool for optimising interest yields on leading cryptocurrencies without the need to manually move funds from one platform to another.

Yearn.Finance automatically directs user funds to a wide range of different interest-bearing protocols, including big names like Aave and Compound. However, it also earns interest for users by directing deposited assets into liquidity pools on decentralised exchanges (DEXes) such as SushiSwap.

Using Yearn.Finance doesn’t require that you hold any YFI tokens (though you can earn interest on YFI by depositing it on the platform). Rather, YFI was designed as a governance token for the Yearn.Finance protocol.

Originally, Yearn.Finance was solely controlled by Cronje, the protocol’s creator. However, Cronje decided that he didn’t want to be responsible for continuously updating and managing the protocol. So he released YFI tokens to decentralise the platform.

Anyone can propose changes to the Yearn.Finance protocol, even if they don’t hold any YFI tokens. However, only YFI token holders can vote on proposed changes and make them official. Without YFI tokens, the Yearn.Finance protocol wouldn’t be able to grow, change, or add new features over time.

Here’s a quick video that summarizes how Yearn.Finance and the YFI token work:

What are the benefits of holding Yearn.Finance (YFI)?

The purpose of the YFI token is to provide governance votes for proposed changes to the Yearn.Finance protocol. In fact, Cronje himself has stated that YFI has no real value besides providing a management system for Yearn.Finance.

There are only 30,000 YFI tokens in circulation, all of which were distributed to people who had provided assets in a liquidity pool when the token was released in 2020. There’s no YFI mining protocol, so more YFI tokens can only enter the ecosystem if current token holders vote to mint new tokens.

Proponents of Yearn.Finance believe that YFI’s value could continue to rise in the future as more investors want to use the protocol to simplify their yield mining. Since there are so few YFI tokens in circulation, some investors see it as being more valuable than other governance tokens with much larger fixed supplies.

However, Yearn.Finance, like most other DeFi platforms, is in its very early stages of development. Only time will tell whether investors will actually want to continue using the platform to maximise their yields in the future. If not, the value of YFI as a governance token could fall.

Can you earn interest on YFI tokens?

Even though YFI is designed solely for governance purposes, you can earn interest on your YFI holdings through Yearn.Finance. Any YFI that you deposit onto Yearn.Finance is held in a dedicated vault. The interest rates on YFI can change at any time, but they’ve been as high as 13% in the past.

YFI holders can also earn rewards from Yearn.Finance. These rewards come from fees that are paid by investors to the protocol for processing transactions. However, you need to burn YFI tokens in order to receive your rewards, so it’s not a straightforward way to earn passive income.

Best Yearn.Finance (YFI) Wallets

YFI is an ERC-20 token, so you can easily store the keys to it in a wide range of software and hardware wallets.

If you want to simply buy and HODL your YFI, you can use nearly any ERC-20 compatible wallet to store the private keys to your tokens. Popular software wallets that you can use to manage your tokens include Atomic Wallet and Trust Wallet.

Should you want to earn interest on your YFI tokens or access your governance voting rights on the protocol, you may want to use a software wallet with a direct integration to the Yearn.Finance platform.

There are more than a dozen wallets that integrate with the Yearn.Finance DApp (decentralised app), including:

  • MetaMask: One of the most popular software wallets available, MetaMask is a mobile app and browser extension that provides easy access to DApps. Metamask supports all ERC-20 tokens, including YFI, and it has a user-friendly interface that’s compatible with a wide range of decentralised platforms.
  • Coinbase Wallet: Coinbase Wallet is a non-custodial software wallet that was designed by the team at Coinbase. It provides you with full control over the private keys to your ERC-20 tokens such as YFI. The wallet also supports other leading networks, like Bitcoin, and it has a built-in DApp browser. It’s available as a mobile app and as a browser extension.
  • MyEtherWallet: Alongside MetaMask, MyEtherWallet is one of the most widely used ERC-20 software wallets. It supports all ERC-20 tokens so you can manage your YFI tokens with ease. MyEtherWallet is available as a mobile app, web app, and browser extension.

Yearn.Finance also supports WalletConnect, so you can use it with dozens of wallets that don’t have a direct integration with the DApp. Other top wallets that you can use through WalletConnect include the Crypto.com DeFi Wallet and Argent.

For investors that prefer a hardware wallet, some of the best devices for managing YFI tokens include:

The wallet interfaces for both Trezor and Ledger devices both support YFI tokens. Trezor and Ledger wallets also directly integrate with Yearn.Finance so you can earn interest on YFI and access your governance votes right from your device.

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Thanks for checking out this quick guide about how to buy Yearn.Finance (YFI) in the UK!

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