The YFI token (short for Yearn Finance) is a digital currency specific to the Yearn.finance platform, and it is one of the prominent projects in the field of decentralized finance (DeFi) on the Ethereum network. Here is a simplified explanation of its function:

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What is Yearn Finance?

It is a decentralized finance platform aimed at simplifying the process of investing in cryptocurrency yields, through intelligent tools that automatically allocate users' funds to the best protocols that provide the highest returns, such as Aave, Compound, and Curve.

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What is the role of the YFI token?

The YFI token is the governance token of the project, and it is used for:

1. Voting on platform decisions (such as system updates or changes in usage fees).

2. Rewards: YFI holders can earn rewards if they participate in providing liquidity or supporting the network.

3. YFI is not used for payments within the platform; it is more akin to a “voting share” in a company.

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Features of YFI:

• Limited supply: The total supply is only 30,000 tokens, making it relatively rare.

• Launched without an initial coin offering (ICO): It was distributed to early users who contributed to the Yearn protocols.

• Completely community-managed: There is no centralized control over the project.

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