Scientific Internet Access: When using Telegram, Twitter, or a few airdrop websites, you need to prepare your own VPN. There are many free options available online that you can search for yourself.
imToken Wallet: This wallet supports Ethereum and Ethereum ERC20 standard tokens, essential for claiming airdrops. I have placed a detailed usage tutorial in another article:
Essential for Airdrops! How to Create Your ETH Wallet Address Using imToken
Telegram: An instant messaging software from abroad, similar to QQ or WeChat, requires a VPN to use. It has basically become the main battlefield for blockchain and virtual currency communication, as well as for various teams to airdrop tokens. It is recommended to use the mobile app or the web version.
Official Website: https://telegram.org
Biyong: Can be understood as a localized version of Telegram. It is interoperable with the original Telegram account (groups in Telegram can also be found in Biyong) and adds some features on top of the original (such as a virtual currency wallet function).
The advantage of Biyong compared to Telegram is that it does not require a VPN, but the downside is that it is currently not very stable, and there may be situations where you cannot log in. After all, it is connected to external networks, so encountering such issues is relatively normal; just try again later if you encounter problems. Of course, if conditions allow, it is still recommended to use the original Telegram after accessing the internet scientifically.
Official Website: https://biyong.io
Google Chrome: Considering that many people are not very good at English, it is recommended to use Google Chrome, which can translate some English pages with one click. Of course, other browsers with similar functions can also be used.
Twitter: Most people should be familiar with this. If you are hearing about it for the first time, you can understand it as a product similar to Weibo. A small number of token airdrops require you to follow their Twitter account or retweet their tweets. You need to log in after accessing the internet scientifically.
Official Website: https://twitter.com
Facebook: Like Twitter, it is a social product outside the Great Firewall. Sometimes you need to follow the official Facebook page of the project, so you can register. You need to log in after accessing the internet scientifically.
Official Website: https://facebook.com
Google CAPTCHA: Generally appears on some foreign websites, such as airdrop and trading platforms, with a small probability of encountering this thing below, which serves the same purpose as a verification code, to combat bulk registrations by bots. Usually, clicking the box to automatically check it completes the verification. If used frequently within a short period, additional verification operations may be required; just follow the instructions.
Additionally, when claiming airdrops, pay attention to the following common issues:
- Do not send advertisements or make inappropriate comments in any Telegram group;
- Popular airdrops usually end quickly, so you should claim them as soon as you see the information;
- The airdrop process is mostly similar; when CoinMoe releases airdrop information, be sure to read the process introduction carefully, and following the process will not lead to mistakes;
- For airdrops that require joining Telegram groups, after joining or inviting friends, project rewards may be delayed in showing up; do not worry;
- For those involving sending tokens to wallets, they generally will not arrive immediately but will be sent out after a period following the end of the airdrop, ranging from a month to one working day; just wait, and the CoinMoe community will inform you of the airdrop token arrival status. If it has not arrived for a long time, you can contact the Telegram group administrator;
- While waiting for airdrops, there is no need to add airdrop tokens to your wallet; they will show up directly when they arrive;
- Join the airdrop information QQ group and Telegram airdrop channel for more timely information.
Due to discrepancies in price display on some platforms on Non-Small Number compared to the platform's own RMB valuation, the following price data comes from the official websites of various platforms.
Binance: BTC/USDT $12,186.35 | ￥77,884.18
Gate: BTC/USDT $12,159.45 | ￥86,332.10
ZB: BTC/USDT $12,730.01 | ￥85,291.06
Bithumb: BTC/KRW ₩14,820,475.8 | ¥88,940
- Binance & Gate
First, in the data above, Binance, Gate, and ZB all use USDT as the trading currency. The amount of USDT required to purchase BTC on Binance and Gate differs only slightly, but there is a significant difference in RMB valuation.
In previous tutorials, it was mentioned that Tether (USDT) is a virtual currency that claims to be pegged to the US dollar, but when you purchase USDT, there is a premium, generally exceeding the USD to RMB exchange rate of 6.x yuan, and you need to pay over 7 yuan to buy one.
Friends who are not familiar can review the trading basics in the link below:
Complete Tutorial for Depositing, Trading, and Withdrawing on Gate.io and Binance
The reason why the BTC prices in Binance and Gate are similar in USDT but differ significantly in RMB valuation lies in the value of USDT. Binance does not have its own OTC trading platform, so all RMB valuations are estimated according to USDT = USD value, while Gate estimates based on the current USDT price on its own OTC trading platform, as shown in the data below:
Binance: 77,884.18/12,186.35≈6.39
Gate: 86,332.10/12,159.45≈7.10
From this, it can be seen that although Binance appears cheaper in RMB valuation, the price difference for purchasing BTC using USDT is less than 30 USDT, with a difference of only 2‰. It is impossible to make a profit by arbitraging, as you cannot buy USDT in China at a rate consistent with the US dollar.
Additionally, the total asset valuation in Binance accounts is also estimated based on USDT = USD value, so if you buy any virtual currency worth 1000 yuan and transfer it to Binance, excluding transaction fees, its valuation will be less than 1000 yuan. If you want to understand the true RMB valuation of all your assets in Binance, you can use the formula below:
Total Valuation in Binance in RMB * (Gate's USDT Price / Current USD Exchange Rate) ≈ Total Asset Value in Binance Converted to RMB
This formula can also be applied to calculate the current RMB value of a specific token in Binance:
RMB Valuation of the Token in Binance * (Gate's USDT Price / Current USD Exchange Rate) ≈ True RMB Valuation of the Token in Binance
- Gate & ZB
From the data above, it can be seen that although the price difference in RMB valuation between ZB and Gate's BTC is less than 1%, the price difference in USDT is nearly 600. The issue also lies with USDT. Both platforms have their own OTC trading platforms, but the peculiar thing about ZB is that its USDT is very cheap, with the calculation as follows:
ZB: 85,291.06/12,730.01≈6.7
Many people might think, why not buy such cheap USDT? However, cheap as it is, ZB's USDT is actually not very useful because once purchased, it can only be used on ZB and cannot be transferred out, which can be considered as ZB's own platform token. Do not treat this as real USDT. Therefore, the RMB required to buy BTC on both platforms is roughly the same. (Updated March 2018: Currently, ZB's USDT supports withdrawals.)
- Bithumb
Bithumb is a large exchange in South Korea, and trading BTC using Korean Won (KRW) does indeed have a high premium, but due to current policies in South Korea, non-Korean residents cannot trade on Bithumb. Therefore, if you do not have relatives or friends in South Korea, do not think about arbitraging to Bithumb for profit.
In summary, under normal circumstances, the RMB purchase costs for the same token across platforms are relatively small. When purchasing mainstream virtual currencies, there is no need to spend time and effort comparing price differences across platforms; just buy directly on a major platform, and you generally won't go wrong.
- CeFi and DeFi Before discussing DeFi, let's first talk about its counterpart, CeFi.
CeFi refers to the current "centralized finance," which is a financial system that involves "intermediary institutions." For example, transferring money requires going through banks, loans require borrowing institutions, and trading cryptocurrencies requires centralized exchanges (CEX) like Binance and Huobi. All these financial activities rely on intermediary institutions to maintain security.
The downside of CeFi is that if an intermediary institution encounters problems, users' interests are likely to be harmed, such as server outages, bank failures, or exchange bankruptcies.
DeFi, in contrast, refers to "decentralized finance," which is a financial system that does not have "intermediary institutions." Instead, protocols and smart contracts replace the functions of intermediaries. For example, peer-to-peer digital currency transfers can be achieved simply through wallets, and collateralizing digital currencies can automatically facilitate loans and repayments. In DEX (decentralized exchanges), users can fully control their digital assets without being subject to exchange regulations.
The advantage of DeFi is that it eliminates the possibility of intermediary malfeasance, theoretically making it more secure.
The concept of DeFi was proposed by Brendan Forster in 2018, who also put forward three main attributes of DeFi applications: running on public chains, open-source code, and financial applications. In fact, this concept is very broad; the issuance of BTC can be considered the first application of DeFi. In addition to digital currency issuance, asset trading, lending, and investment based on blockchain and smart contracts can all be viewed as part of the DeFi industry. In the future, real-world assets may also be introduced, such as putting real estate on the blockchain.
The above is just a brief introduction to DeFi. In the future, CoinMoe may have the opportunity to explain more about DeFi knowledge points. It is sufficient for everyone to have a basic understanding here, as the concept of DeFi is quite simple; the complexity lies in the gameplay of these DeFi projects.
Now let's start discussing the projects.
- Decentralized Lending ① MakerDAO
Token: DAI/MKR
Highlights: Decentralized Stablecoin + Lending
Official Website: makerdao.com/
The first phenomenal application in the DeFi market is MakerDAO, which has long dominated the top three in DeFi locked value rankings.
MakerDAO is a lending product that operates by generating stablecoins through over-collateralization. The specific principle is: users collateralize ETH (or USDC, BAT, KNC, and other tokens) to generate the stablecoin DAI (1 DAI = $1), which is equivalent to taking out a loan in digital currency, and when repaying, they return DAI plus interest. If you hold a large amount of ETH, are bullish in the long term, but urgently need cash, you can use MakerDAO to obtain a stablecoin loan without selling ETH.
In the real world, mortgage loans are often secured by real estate, which has relatively stable value, but the digital currency market can fluctuate wildly. What if the value of collateral like ETH drops and leads to insolvency?
This is where the benefits of DAI's over-collateralization come into play. When generating DAI, it is necessary to collateralize assets worth more than its value. For example, collateralizing ETH worth $200 to generate DAI worth $100 means that as long as the price of ETH does not halve, there will be no bad debts. Additionally, there is a concept of a "liquidation line" in DAI. When the value of collateral drops, causing the "value of collateral/value of DAI borrowed" to fall below the liquidation line, forced liquidation will be triggered, and the user's collateral will be auctioned off to repay the previously borrowed DAI. Each type of collateral has a different liquidation line; for example, ETH has a liquidation line of 150%, meaning that if the value of the collateralized ETH falls below 1.5 times the value of the borrowed DAI, liquidation will be triggered.
Overall, the generation method of DAI and USDT stablecoins is similar; both involve collateralizing assets to generate stablecoins. The difference is that USDT is managed by the centralized Tether company, and whether the company has truly collateralized sufficient assets is unknown. If they only collateralize $1 billion worth of assets but issue $10 billion worth of USDT, then in the event of a bank run, Tether cannot guarantee a 1:1 payout. In contrast, all operations related to DAI's collateralization, generation, and liquidation are executed through smart contracts, and everyone can view the collateral situation on-chain, making it fully auditable and transparent, which is the advantage of DeFi.
Another major feature of MakerDAO and other DeFi projects is decentralized governance, which can be understood as "democracy." Holding "governance tokens" is equivalent to holding shares or votes in the project, allowing participation in important decisions. MakerDAO adopts a dual-token system, with DAI as the stablecoin and MKR as the governance token. Holding MKR allows participation in MakerDAO's decentralized governance, which includes adding collateral types, modifying existing collateral debt types, and changing key parameters like debt limits and liquidation ratios.
② Compound
Token: COMP
Highlights: Liquidity Mining + Lending
Official Website: compound.finance/
Compound is also a lending platform, but unlike MakerDAO, it does not need to issue stablecoins. Instead, it maintains market operations through a shared token pool for lending. The platform supports lending for various digital assets such as BAT, DAI, ETH, USDC, etc., with each asset corresponding to a token pool.
As shown in the diagram above, users first need to collateralize digital assets into the corresponding token pool in the "Supply Market" to receive a collateral certificate called cToken. For example, collateralizing DAI will yield cDAI. After collateralization, users can qualify for loans and enter the token pools in the "Borrow Market" to borrow other assets. Similar to banks, collateral (deposits) can earn interest, while loans incur interest, with the platform's revenue coming from the interest rate spread generated by lending.
In the lending operation, a user's loan limit will be less than the collateral value, which is similar to MakerDAO. Essentially, both involve over-collateralization, and when the liquidation line is reached, collateral assets will also be liquidated to avoid bad debt risks.
Here, we need to discuss the concept of "liquidity." The flow of tokens in the token pool represents liquidity, and both collateralization and lending can be seen as providing liquidity. In this process, users will receive platform tokens COMP as rewards based on the liquidity they provide, which is known as "liquidity mining."
COMP is the governance token of Compound, similar to MKR for MakerDAO. Holding COMP allows participation in platform decision-making (Note: The DeFi projects mentioned below that include token incentives generally have similar decentralized governance schemes, which will not be explained one by one).
The COMP mining cycle lasts for four years. For every block produced on Ethereum, 0.5 COMP is issued, with 2880 COMP issued daily, with both collateral providers and borrowers receiving 50% each, distributed according to their liquidity provision (amount of collateral and loans) based on market share.
The token pool model of Compound has several advantages over MakerDAO:
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Liquidity Advantage: The liquidity mining rewards of COMP essentially serve as additional subsidies for both borrowers and lenders, allowing collateral providers to earn more and borrowers to pay less interest. This is not only more friendly to those with real financial and borrowing needs but also attracts many speculators to frequently participate in mining, injecting liquidity into the token pool.
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Separation of Lending: In MakerDAO, borrowing and lending are bundled together, with collateral and loans generated simultaneously. In Compound, however, users can collateralize without borrowing; collateral itself can generate returns, achieving financial management.
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Freedom of Lending Direction: Different token pools are independent of each other, allowing users to collateralize or borrow any asset supported by the platform, better meeting the diverse needs of the market.
③ Aave
Token: LEND
Highlights: Floating Rate Lending + Flash Loans
Official Website: aave.com/
Aave was formerly a P2P lending platform called ETHLend, which raised nearly $18 million through an ICO in 2017. It later transformed into a non-custodial money market protocol based on token pools, officially launching earlier this year. Its operating model is similar to Compound's token pool but supports a wider variety of digital assets. As of now, Aave supports lending for 20 types of digital assets, including DAI, TUSD, BUSD, YFI, and SNX. Its token is named LEND.
In Aave's lending operations, there are two notable innovations. First is the interest-bearing token aToken. When users collateralize assets into the token pool, a corresponding amount of aToken is generated, which generates interest in real-time in the wallet, allowing users to view the growth of their balance at any time. The second innovation is the interest rate conversion feature. When borrowing in Aave, users can choose to use a stable or floating interest rate, allowing them to adjust according to market conditions to maintain the best rate. For example, during rising interest rates, they can choose a floating rate, and during falling interest rates, switch to a stable rate.
Additionally, Aave's killer feature is "flash loans."
The principle of flash loans is to execute multiple smart contract operations within a single block (one transaction), such as completing a loan, trading arbitrage on a DEX, and repaying funds in one go, thereby achieving arbitrage. If the expected outcome is not achieved, the operation can be reverted. Flash loans do not require collateral; users only need to repay the funds immediately. If not repaid, the transaction will be automatically reverted, and neither the user nor the token pool will incur losses.
The idea of flash loans provides traders with some operational space, allowing even those with no funds to safely utilize large amounts of capital to engage in trading arbitrage based on small price differences.
- DEX and Aggregators Before diving into the main topic, let's first understand the principles of DEX and look back at some earlier DEX products.
DEX (Decentralized Exchanges) is a concept derived from CEX (Centralized Exchanges). The places where we usually trade cryptocurrencies—such as Binance and Huobi—belong to CEX, where you need to create an account, undergo KYC, and then store funds in the CEX for trading. When withdrawing funds, you need to apply to the CEX. In this process, buying or selling digital assets only represents a change in the numbers in your account. For example, if you use 400 USDT to buy 1 ETH, the CEX will deduct 400 USDT from your account and add 1 ETH. These funds circulate within the CEX, and only when you withdraw the assets to your own wallet do they go on-chain, which is when they truly belong to you.
The problem with CEX is that it is essentially a centralized company, and the funds we hold there are managed by this company. If it engages in malicious acts such as embezzling user funds or going bankrupt, we will suffer losses. Additionally, incidents of theft, flash crashes, and data manipulation are also rampant in CEX.
- High Fees and Low Efficiency: CEX operates on centralized servers, so transactions do not need to go on-chain, resulting in high transaction efficiency and low fees, generally achieving 0.1% or even lower. In contrast, DEX transactions run on-chain, so they inevitably suffer from slow transaction speeds (block confirmation times) and gas fees (miner fees) in addition to transaction fees. Especially on the most popular Ethereum public chain, a transaction can often take over ten minutes to complete, with gas fees sometimes reaching hundreds of yuan. Each operation, such as placing an order, canceling an order, or trading, counts as a separate transaction, which is unbearable for ordinary traders. Due to these technical limitations, contracts, options, and other derivatives that can be perfectly supported on CEX are difficult to implement on DEX.
To address the issues of high fees and low efficiency, early DEX solutions mainly consisted of two types: semi-centralized models that combine off-chain matching with on-chain settlement, and DEX built on relatively efficient and low-fee public chains like EOS and Stellar. The former is merely a transitional product that seems to balance trading experience and efficiency but does not solve either problem. The latter offers a better experience, but unfortunately, quality assets on other public chains are too few to compete with the dominant Ethereum.
Due to the above issues, DEX has consistently lagged behind CEX in competition, as there is no necessity for users to choose poorly performing DEX.
This year, DEX has seen some innovations, but there are still no suitable solutions to the aforementioned problems. Its explosive popularity is not due to increased practicality but rather because it has adopted the "liquidity mining" model. This will be elaborated on below.
④ Uniswap
Token: None (Update: Governance token UNI has now been issued)
Highlights: DEX + Liquidity Mining
Official Website: uniswap.org/
Uniswap is a DEX based on token pools and liquidity mining. The token pools are similar to those described earlier in Compound, but Uniswap, as an exchange, theoretically supports an unlimited number of tokens and token pools. Liquidity mining involves injecting funds into these token pools to earn a share of the platform's trading fees.
The specific principle is that miners (liquidity providers, LP) participating in Uniswap liquidity mining must deposit two types of tokens into the corresponding token pool in a 1:1 value ratio (injecting liquidity). For example, to participate in the USDT/DAI trading pair mining, if the current rate is 1 ETH = 400 DAI, you must deposit ETH and 400 times the amount of DAI into the two token pools. The subsequent trading fees generated by this trading pair will be distributed according to the share of liquidity injected by the miners. Additionally, when injecting liquidity, an LP Token is issued, which can be understood as a receipt. Different trading pairs have different LP Tokens, and when withdrawing funds (removing liquidity), the principal and earnings will be distributed to the wallet, and the LP Token will be destroyed.
Uniswap differs from traditional DEX in that it does not provide one-to-one matched trading for users but instead automatically calculates prices based on the amounts of assets in the token pools and a simple formula "X * Y = K." Here’s an example to illustrate.
In the formula, X and Y refer to the respective token amounts in the two token pools, and K is the product, which remains relatively constant in each transaction.
For the USDT/DAI trading pair, suppose there are currently 2 ETH and 800 DAI in the two token pools, then K = 2 * 800 = 1600;
If you want to use 100 DAI to buy ETH, you send 100 DAI to the token pool, of which 0.3% will be deducted as a fee, so the actual amount going into the token pool is 100 * (100% - 0.3%) = 99.7 DAI;
At this point, the total amount in the DAI token pool is 800 + 99.7 = 899.7 DAI;
Using the formula, we can deduce that the amount in the ETH token pool should be 1600 / 899.7 ≈ 1.78 ETH;
Thus, the amount of ETH you can obtain is 2 - 1.78 = 0.22 ETH.
After this transaction is completed, the 0.3 DAI fee deducted during the transaction will return to the DAI token pool, forming a new K value for the next transaction. The K value will gradually increase with the number of transactions.
If you want to trade between tokens that do not have corresponding token pools, for example, if you want to use DAI to buy a XXX token, the system will automatically convert DAI to ETH and then use ETH to buy XXX for you. However, if XXX does not even have a token pool on Uniswap, meaning there is no liquidity, then trading is impossible.
From the example above, it can be seen that Uniswap automatically prices based on the supply and demand relationship in the token pools, which brings two issues:
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Lack of Price Discovery Function: When the price of a token on CEX experiences severe fluctuations, Uniswap's response will be delayed, relying on arbitrageurs to balance the price difference with CEX. For example, if the price of ETH suddenly halves from 400 DAI to 200 DAI, Uniswap cannot specify a price for buy or sell orders; it can only rely on arbitrageurs to continuously sell ETH to drive the price down.
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Unfriendly to Large Funds: According to the data in the example, if there are only 2 ETH in the token pool and you want to buy half, the average transaction price will be pulled higher than the market price. Conversely, if you sell a large amount of ETH, it will lower the average price. The costs incurred from this loss in Uniswap and other DEX are referred to as "slippage." The higher the slippage, the greater the price difference. The solution to this problem is simple: as long as enough miners inject sufficient liquidity into the token pools, similar to increasing "trading depth" in CEX, the slippage on Uniswap has already become very low, with some popular trading pairs seeing slippage as low as 0.01%.
Uniswap's model is known as AMM (Automated Market Maker), where all miners participate in market-making through smart contract management, maintaining liquidity and trading depth. Currently, several popular DEXs adopt the AMM model.
⑤ Sushiswap
Token: SUSHI
Highlights: DEX + Liquidity Mining + Token Incentives
Official Website: sushiswap.org/
Uniswap is currently the king of DEX, but it has left a gap in the market—token incentive models.
The liquidity mining rewards of Uniswap come entirely from the 0.3% transaction fee, which is related to the platform's trading volume and the total amount in the token pool. For early miners who have put in more effort and taken on more risks, there is no way to gain growth-based rewards on Uniswap. Additionally, as Uniswap develops, the shares of early miners will be diluted by later entrants, including users and institutions. When the growth rate of Uniswap's trading volume cannot keep up with the growth rate of the token pool, miners' income will inevitably decline.
Sushiswap also has a transaction fee of 0.3%, but it is divided into two parts: 0.25% is distributed to miners, and 0.05% is used to buy back SUSHI and distribute dividends to all SUSHI holders. Doesn't this sound a bit like the "mining through trading" model from 2018?
To attract users from Uniswap's top traffic, Sushiswap adopted a clever strategy—launching SUSHI mining first and then the DEX functionality. The first 100,000 blocks of SUSHI mining were only available to miners in Uniswap.
As mentioned earlier, injecting liquidity into Uniswap yields corresponding LP Tokens as receipts. Sushiswap has leveraged LP Tokens. Miners can stake their Uniswap LP Tokens on Sushiswap to earn SUSHI mining rewards, supporting LP Tokens from 13 specified token pools like USDC/ETH, DAI/ETH, and SUSHI/ETH.
For miners participating in Uniswap liquidity mining, this is equivalent to receiving an additional SUSHI airdrop on top of their Uniswap earnings, and it is a tenfold increase in yield. Naturally, miners are willing to stake all their LP Tokens on Sushiswap.
After 100,000 blocks (about two weeks), Sushiswap will migrate these 13 token pools to its own platform, at which point Sushiswap's DEX will officially launch, allowing for real mining and trading on Sushiswap.
Sushiswap's actions are entirely about attracting users on someone else's turf, using additional rewards to capture miners' attention. After the migration, most Uniswap miners will likely switch to Sushiswap, directly draining Uniswap's liquidity.
This strategy has been wildly imitated, with a large number of "food" clones like KIMCHI (Kimchi) and NOODLE (Noodles) appearing rapidly, only to collapse quickly, lasting anywhere from a day to just a few hours.
The biggest instability factor for Sushiswap lies in the linear infinite issuance of SUSHI tokens. If Sushiswap cannot sustain trading volume growth after migration and dividends cannot continue to increase, then over time, the value of the infinitely issued SUSHI tokens will inevitably decline.
⑥ Curve
Token: CRV
Highlights: Stablecoin DEX + Liquidity Mining + Yield Aggregation
Official Website: curve.fi/
Curve is also a DEX based on AMM, but it primarily focuses on trading stable assets, supporting various mainstream stablecoins and BTC-pegged coins like renBTC and wBTC, with low slippage and low fees. Its biggest advantage lies in yield aggregation.
Miners' earnings on Curve are quite diverse, including a share of trading fees, additional interest, and token rewards (platform governance token CRV or other tokens), with each token pool offering different returns.
Curve's trading fee is very low, only 0.04%. The fees and CRV rewards are distributed to liquidity-providing miners, similar to previous DEXs. Additional interest comes from lending protocols or lending aggregators, such as Compound mentioned earlier. When users deposit DAI or USDC into Curve's Compound pool, the system automatically places the funds into Compound to earn interest, converting them into collateral certificates cDAI or cUSDC, allowing users to earn from both Curve and Compound simultaneously.
The Y pool mentioned above refers to deposits earning interest through Yearn, with a mechanism similar to the Compound pool, which will be discussed later.
⑦ Yearn
Token: YFI
Highlights: Yield Aggregator
Official Website: yearn.finance/
Yearn.finance, formerly iearn.finance, is a stable asset yield aggregation platform that supports multiple DeFi protocols, automatically reallocating funds between protocols to help depositors achieve the highest yield. The platform aggregates Compound, dYdX, Aave, and DDEX protocols. When users deposit into Yearn, the platform automatically allocates funds to the currently highest-yielding protocol and generates collateral certificates called yTokens (such as yDAI, yUSDC, etc.), allowing users to withdraw both principal and earnings through yTokens. It is equivalent to a fully automated financial manager.
In addition, Yearn has a product called Vaults (Gun Pools), where users deposit funds, and the system automatically uses relevant strategies to generate yield. For example, Yearn has partnered with Curve to launch the Y pool (refer to the previous section), allowing users holding yTokens to earn yield on Yearn while also receiving liquidity rewards in Curve's Y pool, and the CRV earned can be reinvested in Yearn for further yield.