The crypto industry is known for its dramatic price action, euphoria and bubbles. In the latest sustained fad since the 2017 initial coin offering, or the ICO boom, the decentralized finance niche of the industry now captivates the attention of many participants. One particular asset within this niche, YFI, has pumped to amazing price heights, totaling at least 4,400% gains inside a two-month span. Is this price action warranted, and does the token have actual value?

“YFI’s value lies in its design as a governance token, allowing the community to vote and decide on the direction of the Yearn Finance project,” Jason Lau, the chief operating officer of the OKCoin crypto exchange, told Cointelegraph. “As activity within the project and vaults grow, YFI holders can change strategies, launch new vaults, and potentially even redirect treasury or fees to themselves at a later date.”

“While YFI currently does not offer any returns, there are proposals in the works that could see YFI holders that stake their YFI for governance, [they] would get a portion of the performance fees — and potentially even redirect treasury or fees to themselves at a later date,” Lau added, pointing to a relevant blog post.

Although crypto exchanges see value in YFI, their appraisals of the token may be biased because of the profits they gather by hosting trading for a popular asset. Binance, OKCoin and numerous other exchanges provide YFI trading on their respective exchanges.

Setting the scene

YFI is the token associated with the DeFi yield aggregation platform Yearn.finance. Essentially, the project stands as another opportunity for DeFi participants to shift their money around by borrowing and loaning assets for collateral and earning interest on holdings while also trading various pumping assets.

Between late July and the first half of September 2020, YFI ballooned