A quick history lesson –
yearnFinance was released in July 2020 by computer scientist Andre Cronje. Cronje was a yield farmer who got sick and tired of moving his money around each day trying to find the best yield and also having to pay high fees to enter and leave lucrative paying pools/vaults.
What happened next was incredible. Cronje created yearnFinance and rewarded users who used yearnFinance and paid them in YFI.
The phrase “don’t buy it earn it” was thrown around a lot at the time. But, as usual, people don’t listen and the token started trading on Uniswap and shortly after was listed on Binance during the DeFi summer last year.
The YFI token is a governance token that allows holders to vote on the projects roadmap and future direction of Yearn.Finance which incentivises user to act in the best interest of the protocol as a better outcome for the project results in a much high token price.
There are 30,000 YFI tokens and Andre, being the revolutionary that he is, didn’t keep any for himself… this is known as a fair launch. Andre did mention he was farming from the start so he had a considerable amount of YFI so it isn’t all doom and gloom.
Because of the scarcity of the YFI token (30,000), in September 2020, 2 months after launch, YFI reached a whopping $43,000/YFI…
30,000 supply is ridiculously low… in a good way.
Zooming in at what happened during the first week of launch on Binance you can see it wasn’t all rosy…
Unfortunately, some people buy the top and sell the bottom. If anyone did that on the first few days of YFI being listed they might have taken a 48% hit, when if they had held could have seen 10x returns in a matter of weeks…
Listing days are always very very volatile, new people coming in, old-timers selling the top (good for them), but don’t take a short-sighted view, this is always the long game.
I remember the RUNE Binance listing like it was yesterday and it took a while for RUNE to recover… I, unfortunately, got impatient and sold RUNE at $2… for a 2x profit not bad but also not good either.
So, that now brings us to Beefy Finance –
Beefy Finance released in December 2020 as a Binance Smart Chain equivalent of YFI. (yearnFinace runs on Ethereum). But it doesn’t stop there…
Recently Beefy has expanded to the HECO chain and AVALANCHE, further increasing its reach. Where next? Who knows, but it doesn’t show any signs of stopping.
The beefy team have been relentless in their quest to be the top yield aggregator in this space and I have a lot of faith they will be.
There are 80,000 BIFI tokens although if you dig a bit deeper the supply quickly decreases. 8,000 BIFI tokens are time-locked for the developers meaning that they can’t just dump 10% of the total supply on the market. Very reassuring.
This is the list of the top 10 holder addresses from BSCscan. As you can see the top account holds 65% of all Beefy, now before you panic, this is a good thing and it isn’t an account. It is the governance pool.
All the beefy holders who stake their tokens in this account (as with YFI) get a vote on the future direction of Beefy… Genius.
So as you can see this drastically reduces the supply even further. Basic economics/tokenomics, reduce the supply, increase the demand. So although there are more BIFI tokens to YFI tokens an awful lot of BIFI tokens are locked up in governance pools and vaults.
What about locked YFI? Well, I thought of that too…
I will leave this list to your interpretation. Supply. and. demand.
What are the market caps of both?
You can see the market cap difference is around 6x the difference between YFI/BIFI
The total value locked (TVL) is the amount of $ in each platforms vaults. So all the yield farmers who use each platform the total amount locked on each dApp is the TVL.
YFI – $808 million TVL.
Beefy – $330 million TVL.
A good metric is Marketcap/TVL and a good ratio to aim for is 1.0. It only makes sense to have the value of the company equal too or greater than the TVL.
YFI is currently 1.56 MC/TVL
BIFI is 0.667 MC/TVL
Do the math.
If you would like to buy Beefy Finance or Yearn.Finance you can do so here by signing up to Binance. Just click THIS LINK to start the sign-up process and receive a free $5 if you use our referral link.
Summary –
There are arguments that I can hear through this page, but what happens when ETH2 goes live and everyone uses ETH again? Well, for one that’s great, but they aren’t here…
Binance Smart Chain transactions are consistently greater than ETH at the minute and will be for a while yet.
And given the progress and ruthlessness beefy shown, what makes you think they will stop at BSC, HECO and AVALANCHE? Watch this space I wouldn’t be surprised to see Beefy go the whole way.
Those ETH competitors need yield aggregators too you know…
I think there is room for both to survive and thrive. I also think YFI is going to attract the diehards and tech-orientated, whilst Beefy couldn’t be easier to use if it tried. The new UI for Beefy set to be released is sure to be a hit with all newcomers to DeFi.
The Binance listing was inevitable and will bring even greater numbers to DeFi, lets just hope those great returns don’t have to be shared by too many people… Just kidding.
This is not financial advice, investment advice or any other advice. I am a complete moron an this is for educational and entertainment purposes only. DYOR and never invest more than you can afford to lose.
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