Yearn Finance houses a range of products in Decentralised Finance (DeFi), providing yield generation, lending aggregation, and more on the blockchain. The protocol is maintained by various independent developers and is governed by YFI holders. Yearn’s core product offering centers around the concept of Vaults. These vaults are pools of capital that automatically generate yield. They benefit Yearn users by socialising the gas costs, automating the yield generation process, and automatically shifting capital as opportunities arise to maximise returns. Here’s our in depth, step-by-step guide on how to use Yearn Finance.
How To Connect your Wallet with Yearn Finance
To get started with Yearn Finance you need to Connect your wallet.
Click on the ‘Connect’ button in the top right-hand corner of the screen.
Multiple types of wallets are supported including Ledger, Trezor, and Coinbase Wallet. For this example, I am going to be using a MetaMask wallet. When connecting your wallet, make sure that it is connected to the Ethereum network.
How To Use Yearn Finance Vaults
Vaults on Yearn Finance is the core offering to users on the platform. After depositing into a vault, your funds first go into a vault contract and then they are deployed to one or more strategy contracts. Yearn vaults maximise their yield returns by shifting the capital within, auto-compounding, and then rebalancing.
To access vaults on Yearn Finance, click on the ‘Vaults’ item in the navigation menu.
1. Select the vault you wish to deposit into.
For this example, I am going to deposit into the $ETH vault. You will also see that each vault provides information about how the tokens deposited are used via each strategy.
Because many of Yearn’s vaults generate yield by using Curve Finance liquidity provider (LP) tokens, which are acquired through depositing into a Curve pool – it may be the case that you don’t have the required token for the vault that you would like to deposit in. Yearn’s ‘zap‘ feature allows you to convert the crypto you have in your wallet into the token you need as part of the deposit process.
For example:
If you would rather deposit into the ‘Curve CRV-ETH’ vault instead of the $ETH vault, but you only have $ETH in your wallet, your $ETH will need to be converted to a ‘Curve CRV-ETH’ token before it’s accepted in the vault.
2. Select the amount that you wish to deposit into the vault
Enter the number of tokens you want to deposit into the vault.
If you are depositing ETH, make sure you have enough ETH left over to pay for future transactions that you might need to make.
3. Approve the transaction
Click on either the ‘Approve’ or ‘Deposit’ button. If you have not previously approved the use of your tokens from your wallet, you will need to do so before being able to deposit them into the vault.
Once this has happened, click on the ‘Deposit’ button, and confirm the transaction in your wallet.
4. Transaction complete
When your transaction succeeds, you will receive confirmation on screen.
Click on the ‘Done’ button.
5. See your deposited balance
You will see your deposited balance in the vault.
You will also see your deposited balance in the landing page for the vaults, which should appear at the top of the vault list.
Yearn Labs takes the concept of a vault that little bit further. Labs are essentially vaults that have much more riskier strategies, and therefore, higher rewards associated with them. You must make sure that you review these vaults carefully, making sure that you understand any token locking, impermanent loss, and other associated risks before proceeding with depositing into them.
The Labs section on Yearn Finance is currently made up of three vaults – $yveCRV, ‘yvBOOST’, and ‘yvBOOST-ETH pJar’ (a product launched in collaboration with pickle.finance).
The process for depositing into one of the Yearn Labs works in the same way as the vaults as mentioned above.
1. Select the ‘Lab’ that you wish to deposit into
For this example, I have used the ‘yvBOOST’ lab.
Note that this lab is powered by Curve Finance and you need the $yveCRV token to deposit into it. I didn’t happen to have this token in my wallet, but I did have some Ethereum.
I was going to use Yearn’s ‘zap’ feature mentioned above, converting some of the $ETH in my wallet into the $yveCRV token. However, going down this route costs significantly more gas (3-5x more). Instead, I took my wallet, connected it to SushiSwap and swapped some of my ETH for $yveCRV on there. This was a significantly more cost-effective way of doing it.
You can go straight to the token using this link:
Once you have some $yveCRV tokens in your wallet, click on the ‘Deposit’ button for the ‘yvBOOST’ lab.
2. Select the amount you wish to deposit into the lab
Select the amount you wish to deposit into the lab.
3. Approve the transaction
Click on either the ‘Approve’ or ‘Deposit’ button. If you have not previously approved the use of your tokens from your wallet, you will need to do so before being able to deposit them into the vault.
Once this has happened, click on the ‘Deposit’ button, and confirm the transaction in your wallet.
4. Transaction complete
When your transaction succeeds, you will receive confirmation on screen.
Click on the ‘Exit’ button.
5. See your deposited balance
You will also see your deposited balance in the landing page for the labs, which should appear at the top of the labs list.
Withdrawing Funds from Vaults & Labs
If you want to withdraw your funds from a vault or lab, you will need to go back to that vault lab.
1. Click on the ‘withdraw’ tab
Enter the amount that you want to withdraw or click on ‘Max’ to withdraw the entire balance.
2. Choose how much you want to withdraw
Enter the specific amount that you want to withdraw or click on ‘Max’ to withdraw the entire balance.
3. Withdraw your funds
Click on the ‘Withdraw’ button and confirm the transaction in your wallet.
If you have not previously, you may need to click the ‘Sign’ button and authorize the transaction in your wallet before being able to withdraw.
Once confirmed and the transaction has been completed, your withdrawn funds will be available in your wallet.
Enjoy earning yield with Yearn Finance!
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Rebecca is a crypto investor and content writer based in the UK.
She specializes in breaking the news into bite size pieces and simplifying investing topics.
You will find her on Twitter and Instagram providing crypto and investing education.
