How To Short Yearn.finance (YFI)

    • James Page

James HeadshotAuthor: James Page - Last Updated on June 28, 2022

Summary: Shorting Yearn.finance is pretty straightforward, all you need is a crypto trading platform that allows for short selling. While there are a few exchanges out there that have added the ability to short crypto, our recommendation is to use eToro. They’re well-known, have a global presence, and are trusted by millions of users from 100+ countries.

We’ll be using eToro in our guide, you can sign up with one of the sign-up buttons below.

Global: Sign up with eToro

USA: Sign up with eToro US

Yearn.finance

Before we get started, let’s quickly explain what shorting is (for those that are new to it). Shorting is the practice of selling a cryptocurrency hoping it will drop in price so you can buy it back later for cheaper… which, if successful, will give you a net profit.

It might sound a bit complex but don’t worry, it’s a lot easier than you might think.

How to Short Yearn.finance

Shorting Yearn.finance can be done in 4 steps:

  1. Find a crypto trading platform
  2. Sign up with the exchange
  3. Fund your account with fiat or crypto
  4. Short Yearn.finance

1. Find a crypto trading platform

As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.

You can, of course, use any other crypto broker that allows for short selling.

etoro crypto

2. Sign up with the crypto exchange

Let’s start with creating an account on eToro.

Global: Sign up with eToro

USA: Sign up with eToro US

 

eToro sign up form

The sign-up process is very quick and easy, as is the verification that needs to be completed afterwards so you can get started.

3. Funding your account

Next is funding your account. You have several deposit methods to choose from when depositing funds into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.

4. Short Yearn.finance

These are the steps to follow to execute a short sell:

  1. Go to the search bar at the top, find Yearn.finance by entering the name.
  2. On the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
  3. At the top of the trading interface: Click on sell to short the crypto.
  4. Enter the amount for which you want to sell Yearn.finance and click on “Open Trade”.

Once you’re ready to close the trade, hopefully when the value of Yearn.finance has dropped, go to your Portfolio, find the Yearn.finance trade, and click on the red cross to close the trade.

If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.

Congratulations, now you know how to short Yearn.finance!

Global: Sign up with eToro

USA: Sign up with eToro US

 

Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.

Affiliate Disclosure: This site is supported by its users. We may receive commissions for purchases made through the links on our site. This does not impact our reviews, guides or comparisons.

 

Where to Short Yearn.finance (YFI)

Aside from eToro, the other major exchange you can use is Binance.

While Binance tends to be a bit more advanced when compared with eToro, they do have a lot more digital assets to trade with.

 

Frequently Asked Questions

Can I short Yearn.finance on Binance?

Yes, you can short Yearn.finance on Binance. They have over 300 cryptocurrencies on offer, have a decent phone app and a lot of advanced trading features.

About Yearn.finance

Yearn Finance offers a range of products that are part of Decentralized Finance (DeFi). They provide lending aggregation as well as yield generation and insurance on the Ethereum Blockchain. The protocol is maintained by independent developers, and is governed YFI owners.

Andre Cronje created it as a passion initiative to automate the transfer of capital between different lending platforms. The goal was to find the highest yielding platform. As interest rates change between these protocols, funds will be automatically shifted to dYdX or AAVE and Compound.

DAI tokens, USDT, USDC and TUSD are all available as part of this service. To illustrate, if a user deposits DAI in yearn.finance they will receive the yDAI token as a return. This token is a yield-bearing DAI.

Curve Finance helped it to develop a yield-bearing USD Tokens Pool that included four y–tokens: the yDAI and yUSDT tokens.

Yearn Finance, which launched the vault function after its token launch, set off a frenzy for automated yield farming. Yearn Finance is considered to be the initiator and pioneer of the category. The vault is designed to allow users to access yield farming rewards as well as sell the vault for the underlying assets.

Vaults can be used to socialize gas costs, automate the yield-generation and rebalancing processes and shift capital automatically as new opportunities present themselves. Vaults don't require users to be proficient in DeFi or the protocols that underlie them. They are therefore a passive investment strategy. It is similar to a cryptocurrency hedge fund, with the goal of increasing the assets users have deposited.

Yearn Finance, its governance token, YFI and was launched to the public in July 2020. Yearn Finance was initially released without any valuation or fundraising. As such, the market didn't understand its value capture and couldn't determine the market price.

Yearn Finance continued its efforts to attract liquidity. It allowed people to earn and participate easily in DeFi. YFI token increased from $30 up to $43,000 in 2 months.

Yearn Finance has continued to consolidate its position as the leading yield aggregator. In 2021 it reached an all time high of $91,000 on May 12, 2021.

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