In 2020, one of the most prominent projects that can be found in the decentralized finance (DeFi) space is none other than Yearn Finance. This week, a glimpse of some of the financial details of this protocol came under the notice of industry insiders and investors. An informal report was put together on Yearn Finance by members of the DeFi community for the project’s first operational quarter. The report highlighted that a significant amount of revenue had been paid by the project to its stakers. The report hasn’t been audited as yet and there hasn’t been any cosigning from the protocol itself or its creators.
The report spans August 20th to October 20th and shows that around $3.79 million was generated by the DeFi protocol in net income. The yVault product offerings were the primary source of revenue for the protocol and the yUSD vault alone contributed about 68% of the project’s total revenues. They had also introduced the yETH vault in September, which had generated revenue of around $545,000, although it had been suspended eventually for mitigating losses and risks. Even though the yETH vault is no longer available, Yearn Finance is planning to relaunch it in the next few months when it will release updated versions for its vault.
It was revealed in the financial report that most of the revenues of the vaults had been generated in the form of withdrawal fees paid by the users. It also highlighted that Yearn would implement a new fee structure soon. This new structure would involve a performance fee of 20% for the upcoming vaults. Going forward, this structure would be incredibly helpful in increasing the revenues. Overall, it is apparent that Yearn Finance is doing quite well financially. During the quarter, the project had gross profits of around $4.14 million, and operating expenses amounted to $306,000, which had been spent on administrative and security costs.
In addition, the protocol had also paid some funds in bug bounties and audits, as well as grants to contributors and developers in its ecosystem. However, the most prominent news about Yearn Finance this month has been its notable acquisition free. In the previous two weeks, it has acquired or merged with several other protocols in the DeFi space, as it is trying to increase its value proposition and user base. The spree had begun on November 25th, when Yearn announced the acquisition of Pickle Finance, a trading and yield farming platform.
This move will be beneficial for Yearn Finance in bolstering the rewards for its yield farming activities. It will also be good for Pickle Finance, which suffered from a devastating hack recently and suffered losses of $20 million in DAI. In the next few days, Yearn Finance had announced deals with Cream Finance, a lending protocol, Cover, an insurance market coverage provider, and Akropolis, a lending and savings protocol. The latest announcement was about a partnership with SushiSwap, which is a leading decentralized exchange (DEX). The partnership will allow both firms to collaborate and share resources.