Yearn Finance is a suite of products in Decentralized Finance (DeFi) designed to generate yield on smart contract platforms like Ethereum. The protocol is maintained by various independent developers and is governed by holders of YFI.
These are capital pools that automatically generate yield based on opportunities present in the market. Vaults benefit users by socializing gas costs, automating the yield generation and rebalancing process, and automatically shifting capital as opportunities arise. End-users do not need to possess a proficient knowledge of the underlying protocols involved or DeFi, thus the Vaults represent a passive-investing strategy.
The first Yearn product was a lending aggregator. Funds are shifted between dYdX, AAVE, and Compound automatically as interest rates change between these protocols. Users can deposit to these lending aggregator smart contracts via the Earn page. This product completely optimizes the interest accrual process for end-users to ensure they are obtaining the highest possible interest rates among the aforementioned platforms