DAI

Yearn Finance is a bunch of strategic contracts (yVaults) that automatically route assets into opportunities presented in the market, such as liquidity pools,‌ ‌automated market making projects,‌ ‌and‌ ‌other yield‌ farming ‌opportunities. The protocol benefits users by socializing gas costs, automating yield generation, and rebalancing processes. Therefore, Yearn represents a yield optimizer.

Strategies in Yearn are complex transaction flows that move assets among third-party DeFi protocols to maximize yields. Strategies in Yearn can be different from each other. Those strategies are also fluid, and the Yearn community can decide to change or adjust a strategy as it becomes less profitable. If you want to learn more about how each strategy works, please refer to the official website.

yvToken represents your share in yVault. It’s minted and burnt upon supply and withdrawal of assets on yVault. For example, when you deposit Dai, you’ll receive a certain amount of vDai from Venus. When you redeem it, these vDai will be disposed correspondingly.

Your yield in Yearn comes from the rewards generated by the yVault strategy.

Here's one main risk Yearn may have: Contract risk: Yearn and its corresponding strategy-related smart contracts could be hacked, or bugs in contracts could be exploited. In such cases, your assets may be lost.