How do yEarn tokens work?

Let’s say I deposit 100 USDC into yEarn. Do I get back 100 yUSDC tokens? How does it keep track of the interest? Eg, let’s say 1 week later someone else deposits 100 USDC into the pool and also gets back 100 yUSDC tokens. Their 100 tokens should be worth less than mine because I would have had 1 more week of interest. So how does it work?

Where do I look for such information? I didn’t exactly find a whitepaper and the Docs are very, very general.

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Hey @sgbafc !

You get the amount of USDC divided by the current “value” of the underlying token (yUSDC). The current value in the USDC v2 vault is 1.056. So your 100 USDC will give you 100/1.056 = 94,7 yUSDC in return.

When the “price”, or value that you get in return for withdrawing rises, so does the amount of USDC you’re going to get in return. If, in 2 months, the price has risen by 2%, and yUSDC is then worth 1,077, you get back your principal (94,7 yUSDC), times the current value (1,077), that makes 102 USDC.

See how it works? It’s quite simple when you grasp the concept :).

Good luck! Make sure you watch out that the gas (network fees of Ethereum) do not eat to much into your profits.

  • Collin43

Thanks Collin43. i just bought USD 140 worth of yearn. If i do not withdraw for 1 year what happens. I need to understand how yearn works. I know its a great platform. Thanks

I was wondering if that is how it works.

But the gas fees you mentioned are only on depositing or withdrawing, right? Because presumably when the funds are in the pools, the protocol will pool it with other funds and make 1 gas fee at a time (the gas fees in ethereum are independent of the amount of the transaction right?). Where would be the best place to read up on some of the relevant details?

The gas fees can easily reduce your eth balance by $60 of the 100 your deposit if you are only pledging that much. Better to deal with larger amounts until Eth stops acting like the very reason crypto was invented _outragrous and irresponsible banks and middlemen… I find conducting transactions on the BSC far better. How nice to only pay 40 cents, not 40 dollars. As for our Eth Chairman, he needs to stop publishing the word bubble. He has no idea and should keep his noble billionaire mouth on mute. The idiocy of genius.

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