yFarm

yFarm is an aggregator of lending that aims at all times to achieve the highest yield for supported coins (DAI, USDC, USDT, TUSD, sUSD, or wBTC). It does this by moving these coins between several loan protocols (AAVE, dYdX, and Compound) that run on the Ethereum blockchain, programmatically. A consumer can, for example, deposit DAI into the yFarm yDAI pool. Yearn Land will deposit DAI into one of three lending protocols (AAVE, dYdX, Compound) on a programmed basis. Yearn would immediately withdraw from one protocol and deposit to another, as interest rates between protocols change. As a consequence, at all times, the customer will obtain the most optimal interest on his or her DAI deposit.

yFarm is a key component of Curve. Finance's yPool, which is a basket of four yTokens: yDai, yUSDC, yUSDT and yTUSD. The four underlying yTokens are constantly being optimized to generate the highest market interest possible (described above), while also serving as a liquidity pool for these tokens. Users can connect with the pool to switch with little slippage between any of the four tokens. Consequently, yPool liquidity providers receive the optimized interest rates on their stablecoin deposits and trading fees from users who swap tokens from the pool.