Crypto fund Polychain Capital raised an additional 141 YFI, the token that powers Yearn Finance, in a move that yesterday expanded its investments in the decentralized finance protocol (DeFi). The firm bought 329 YFIs last week alone, according to Messari researcher Mason Nystrom, and since then, the token’s prices have risen more than 100%.
Yearn Finance has emerged as the quintessential DeFi project in recent months, with the token boasting no pre-sales to venture capital firms or investors and its creator, Andre Cronje, holds no tokens at the time of issue. This has led to a positive narrative for the token among crypto circles.
This, combined with the usability on the Yearn Finance protocol for use cases ranging from token swaps and automated investment management, to lending and lending, it has propelled YFI into one of the fastest growing cryptocurrencies of all time. Its launch in July saw YFI go from nearly $ 30 (excluding free distribution to some yEarn first-time users) to an upward of $ 42,000 in September, a 55.295% increase according to price tracker data. CoinGecko.
But while the skyrocketing prices haven’t lasted long – they’ve dropped nearly 80% since YFI’s peak – crypto funds like Polychain Capital have made moves. The fund raised a total of 470 YFIs this month alone, with an investment worth over $ 8.2 million at press time.
YFI’s low supply limit of just 30,000 tokens make Polychain Capital one of the largest token holders. The fund can now boast of owning 1.6% of the entire offer, all purchased from the free market.
The low supply also makes the token susceptible to wild price swings. YFI went from its issue to an all-time high in less than two months, then it fell to $ 7,300 in the following months, before rising to the current price of $ 17,400 in five days.
But these moves don’t seem to scare investors. A number of features coming to Yearn Finance, such as lower fees, staking support Ethereum 2.0and the purchase of decentralized options, has kept demand high (and the hope of higher prices).
At least until the next bear market.