The code machine has raised a weeks old project to become the most valuable defi token, surpassing $1 billion in market cap.
YFI now is worth more than $36,000, that’s some 100 eth for just one of these very limited tokens.
Their circulation of 30,000 is to become permanent pending a vote which you’d think most likely would pass.
In addition there’s staking here where funds are locked with eligibility for rewards only if you vote. So potentially addressing the usual apathy when it comes to governance.
6,139 YFIs are locked there currently, which means real circulation is 24,000 tokens, making this even more scarce.
Those 6k YFIers get the fees from the Yearn ecosystem which includes investment strategies, ‘simple’ lending and borrowing in Earn, NFT-ed insurance, some new StableCredit soon, and whatever else the code machine may come up with.
Currently this ecosystem apparently generates some $200,000 a day in fees. That’s about twice Uniswap’s fee revenue at about $250 million daily volumes.
That $200,000 translates to $73 million a year. Usually you 10x, and it seems this is currently at a correct valuation price.
That’s if you consider only the present. Markets however like to price in things, with that being a difficult task because who knows what Andre Cronje, the South African that speaks German, as well as Engalish of course, might come up with.
Or indeed Jun-You Liu, the Taiwanese Cornell PhD yETH coder who now works with Cronje alongside a whole team.
Apparently just $500,000 funds this team, although that can be replenished as fees initially go to the treasury if it is holding less than $500,000.
That previous address has far too many transactions so we’ll just estimate that $140,000 has been spent so far in the two months or so this has been running.
Initially it was just Cronje, or so was claimed, but with a whole team now you’d think expenses would go up a bit, yet it seems to be a fairly lean team.
Cronje himself apparently has only circa $100,000, that’s the known address which he initially funded from Binance, so he’s cut our trail.
As you know they didn’t keep any tokens or anything, they living off fees and right now there’s plenty of them to even go to the YFI stakers at about 10% of the investment a year on current figures.
And while there is no way of knowing whether it was really initially just Cronje, there is also no good reason to doubt it as the launch of this business, or even empire, has cost him only 0.99 eth.
The rest of the value came from his ability to write Solidity, so creating a revenue and profit generating business with just one eth.
The first of many such stories perhaps as the barriers to entry are currently pretty much non existent.
Something that will presumably eventually change as the easy opportunities are taken and competition increases, but for now you’d think talent must be racing.