Yearn Finance — Frequently Asked Questions

Depositing into a Yearn Finance Vault is straightforward. Follow these steps:

• Connect your Web3 wallet (MetaMask, WalletConnect, Coinbase Wallet, etc.) by clicking "Connect Wallet" in the top navigation.
• Browse available vaults on the main vaults page and find one that matches your token and risk preference.
• Click on a vault to view its details including estimated APY, TVL, strategies, and fee structure.
• Enter the amount you wish to deposit and confirm the transaction in your wallet.
• You will receive vault tokens (yTokens) in return, representing your share of the vault.

Your vault tokens automatically accrue yield over time. When you're ready to withdraw, simply redeem your vault tokens for the underlying asset plus accumulated yield.

Yearn Finance supports a wide range of digital assets and operates across multiple EVM-compatible blockchain networks. Currently supported networks include:

• Ethereum — the primary chain with the largest selection of vaults including USDC, USDT, DAI, WETH, WBTC, and more.
• Base — Coinbase's L2 network with growing vault selection and lower gas fees.
• Arbitrum One — Ethereum's leading L2 with fast finality and low costs.
• Polygon — established L2 network with a range of supported assets.
• OP Mainnet (Optimism) — Ethereum L2 with Yearn Finance vault support.
• Katana — new network with dedicated Yearn Finance vault products.

Supported token types include stablecoins (USDC, USDT, DAI, USDS, crvUSD, BOLD, AUSD), volatile assets (WETH, WBTC), and LP tokens from Curve Finance and other DEXes.

The estimated APY (Annual Percentage Yield) shown for each Yearn Finance vault is a forward-looking projection based on recent historical performance of the underlying strategies. It is calculated by:

• Measuring the yield generated by each active strategy over recent harvest periods.
• Annualizing that rate to produce an estimated yearly return.
• Accounting for compounding — Yearn Finance automatically reinvests earnings, which is reflected in the APY figure.
• Subtracting protocol fees to show the net return to depositors.

Some vaults display an "Up to" APY which reflects the maximum achievable yield including additional rewards (such as points or partner tokens) on top of the base yield. The displayed APY is an estimate and can fluctuate based on market conditions, protocol utilization, and changes in underlying DeFi rates.

Yearn Finance vaults charge two types of fees, which are displayed on each vault's detail page:

• Management Fee — a percentage charged annually on the total assets in the vault. Many Yearn Finance v3 vaults have reduced this to 0%.
• Performance Fee — a percentage of the profit generated by strategies, typically 10%. This fee is only charged when the vault actually generates yield.

These fees are automatically deducted from the vault's earnings before the APY is calculated, so the displayed APY already reflects the net return to depositors — no surprise deductions at withdrawal time.

Fee structures vary by vault and are always disclosed transparently in the vault detail view. The Yearn Finance protocol routes fees to the DAO treasury, which funds ongoing development, security audits, and strategy development.

Yearn Finance generates yield through multiple DeFi strategies, with each vault deploying one or more approaches depending on the asset and market conditions:

• Lending — depositing assets on protocols like Aave, Compound, or Morpho to earn lending interest.
• Liquidity provision — providing liquidity to AMMs such as Curve Finance to earn trading fees and liquidity mining rewards.
• Yield-bearing tokens — holding or staking yield-bearing assets that natively generate returns (e.g., staking derivatives).
• LP compounding — automatically harvesting and reinvesting LP rewards to maximize compound growth.
• Stablecoin strategies — deploying stablecoins across multiple lending markets for optimized stable yields.

Strategies are written by independent developers and vetted by the Yearn Finance community and security team. The protocol continuously monitors strategy performance and can migrate funds to better opportunities when available.

Yearn Finance has been operating since 2020 and has a strong track record in DeFi. The protocol takes security seriously with multiple layers of protection:

• Smart contract audits — all vault and strategy contracts undergo rigorous third-party security audits before deployment.
• Bug bounty program — Yearn Finance runs an active bug bounty to incentivize responsible disclosure of vulnerabilities.
• Multisig governance — critical protocol parameters are protected by multi-signature wallets requiring multiple keyholders to approve changes.
• Strategy limits and guards — each strategy has built-in risk parameters limiting exposure and potential loss.

However, all DeFi protocols carry inherent risks that users should understand:

• Smart contract risk — bugs or exploits in vault or strategy code.
• Underlying protocol risk — failures in the DeFi protocols strategies interact with.
• Market risk — sudden price movements can affect vault performance.
• Liquidity risk — in extreme market conditions, withdrawals may be delayed.

Only deposit what you can afford to lose. Yearn Finance is a permissionless protocol and does not provide financial advice.

While Yearn Finance is designed to grow your deposits through yield generation, there are scenarios in which the value of your deposit could decrease:

• Smart contract exploits — if a vault or strategy contract is exploited, depositors may lose funds. This risk is mitigated through audits and the bug bounty program.
• Underlying protocol failures — strategies interact with third-party DeFi protocols. A failure in those protocols can affect vault performance.
• Impermanent loss (LP vaults) — vaults holding LP tokens are subject to impermanent loss from price divergence between paired assets.
• Stablecoin de-peg — stablecoin vaults could be affected if the underlying stablecoin loses its peg.

Yearn Finance has historically maintained a strong safety record, but DeFi investing is not risk-free. Always research before depositing and consider diversifying your risk across multiple protocols and vaults.

YFI is the native governance token of the Yearn Finance protocol. It was launched in July 2020 with a fixed supply and no pre-mine or founder allocation — tokens were distributed entirely to users who participated in the protocol at launch.

YFI holders govern the Yearn Finance protocol through on-chain and off-chain governance mechanisms:

• Governance proposals — any YFI holder can submit a governance improvement proposal (YIP) to the community.
• Voting — YFI holders vote on protocol changes including fee structures, vault whitelisting, treasury management, and strategic direction.
• DAO treasury — protocol fees flow to the Yearn Finance DAO treasury, which is controlled by governance vote.

The Yearn Finance DAO operates as a decentralized autonomous organization with contributors from around the world building and maintaining the protocol. YFI aligns the incentives of token holders, strategists, and protocol users toward the long-term success of Yearn Finance.

Yearn Finance has evolved through multiple vault generations, with v3 being the current standard for new vaults. Key differences include:

• Architecture — v3 vaults are built on a modular, ERC-4626 compatible architecture that enables greater composability with the broader DeFi ecosystem.
• Multi-strategy support — v3 vaults can run multiple strategies simultaneously with configurable allocations, improving diversification and yield optimization.
• Fee structure — v3 introduced more flexible fee configurations, with many vaults setting management fees to 0% while maintaining a performance fee.
• Multi-chain — v3 was designed from the ground up for multi-chain deployment, making it easier to launch Yearn Finance vaults on new networks.
• Permissionless strategies — v3 enables a more open model for strategy development, allowing external developers to build and propose strategies for Yearn Finance vaults.

Legacy v2 vaults continue to operate for existing depositors. Yearn Finance encourages users to migrate to equivalent v3 vaults when available to benefit from improved architecture and potentially better yields.

Yearn Finance provides a built-in vault comparison feature that allows you to evaluate multiple vaults side by side. To use it:

• From the main vaults list, click the "Compare" button in the filter toolbar.
• Select the vaults you want to compare by checking them in the list.
• The comparison view will display key metrics side by side including APY, TVL, fees, strategies, and risk parameters.

When evaluating vaults, consider the following factors:

• Estimated APY — the projected yield, but remember this can change over time.
• TVL (Total Value Locked) — higher TVL can indicate more trust from depositors but may also affect strategy yields at scale.
• Fee structure — compare management and performance fees, which directly impact your net return.
• Strategy composition — understand where your funds will be deployed and the risk profile of each strategy.
• Vault age and track record — longer-running vaults have more historical performance data to evaluate.

You can also use the search and filter tools to narrow down vaults by chain, asset type (single asset vs. LP token), or category (stablecoin vs. volatile).

Yes — Yearn Finance is deeply integrated with the broader DeFi ecosystem. As an ERC-4626 compatible protocol, Yearn Finance v3 vaults can be used as building blocks in other DeFi applications. Current integrations and partnerships include:

• Curve Finance — Yearn Finance strategies deploy into Curve liquidity pools to earn trading fees and CRV rewards. Several Yearn Finance vaults hold Curve LP tokens.
• Aave & Morpho — lending protocol integrations for stablecoin and ETH-denominated yield strategies.
• InfiFi — partner protocol with integrated point rewards shown directly in the Yearn Finance interface.
• Spectra — fixed-rate and yield tokenization protocol with Yearn Finance vault integrations.
• Liquity BOLD — Yearn Finance has dedicated vault support for the BOLD stablecoin from the Liquity v2 ecosystem.

The ERC-4626 standard means Yearn Finance vault tokens can be used as collateral, deposited into other yield aggregators, or incorporated into complex DeFi strategies by other protocols and developers — making Yearn Finance a foundational DeFi primitive.

Yearn Finance provides a dedicated Portfolio page where you can track all your active vault positions, historical earnings, and aggregate performance across chains.

To access your portfolio:

• Connect your wallet to the Yearn Finance app.
• Click "Portfolio" in the top navigation bar.
• View all your active deposits, current value, accumulated yield, and estimated APY for each position.

Your vault tokens (yTokens) in your wallet also represent your share of the vault. As the vault grows in value, each vault token becomes redeemable for more of the underlying asset — meaning your balance in terms of vault tokens stays the same, but the underlying value increases over time.

Third-party portfolio trackers such as DeBank, Zapper, and Zerion also support Yearn Finance vault positions if you prefer an aggregated cross-protocol view of your DeFi holdings.