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Launched only a few hours ago, yETH, a new product from the Yearn Finance repository, is already earning rave reviews by users. The new product yETH will allow its users to axiomatically generate high-interest or yield across DeFi protocols when the users stake their Ethereum holdings. Many traders now believe that the demand for it could skyrocket and that could even create a liquidity crisis for ETH. yETH is also known as vault as it will allow users to earn yields together. The community voted for it last night and as per the latest reports and indications, the decision to vote for it is falling in place and trends are bullish.
Any trader, investor, or user who owns ETH will now be able to earn the best yield there is by HODLing yETH automatically. Alex Saunders, the founder of the crypto intelligence site Nugget news reported the same in one of his tweets. This could give rise to competition at an all-new level which would make fellow competitors find it difficult to counter and compete with Ethereum while staking rewards are offered. Many other experts believe that with the emergence of yETH, the total value locked (TLV) of cryptos in various DeFi applications which are used to gain yield and create further liquidity will reach scaling heights surpassing earlier limits and will appear more sturdy relatively. As per the latest figures, the total value locked in DeFi has pinnacled $ 8 billion over the weekend which has doubled in the last one month.
We have all seen how Yearn Finance and its governance token is currently making waves. Over the weekend its value has surged from $14,300 to over $38,000, all credit to the low supply of 30,000 compared to Bitcoin’s 21 million. Traders believe that the current momentum of Yearn Finance will receive further encouragement with yETH vault which will further turbocharge and elevate the DeFi space benefitting users to a large extent. One of the traders believes that the amount of ETH all set to be locked in this vault is going to be groundbreaking and never before seen phenomena. Traders are showing bullish hopes not just for $yfi but also for the overpowering force $ETH.
But not everything can be as rosy as it seems because many experts are also speculating that if large amounts of ETH in the vault could also bring in a situation for Ethereum where there is a supply-side liquidity shock. This could even be true when it is blended with the upcoming launch of the base layer, Phase 0 of the Ethereum 2.0 upgrade that is to take place. Anthony Sassano, the product marketing manager at Set Protocol equates the uETH vault to a black hole. He believes that once ETH goes in and that too in larger quantities, it is going to be extremely difficult for it to come out! In a tweet, he has asked users to reflect on what the consequences would be if that were to happen.