Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with YFI.
No securities regulatory authority has expressed an opinion about YFI, including an opinion that YFI itself is not a security and/or derivative.
Token Description & Project Background
Yearn Finance functions as a yield aggregator within the decentralized finance (DeFi) ecosystem. Among its notable offerings are the Yearn Vaults, which empower the community to propose and implement yield farming strategies through governance.
YFI, the project’s governance token, was distributed via far launch, devoid of any direct token sales to investors. With the introduction of the YFI governance token, the project gained substantial traction. Prior to its launch, the protocol managed approximately US$8 million in assets, which swiftly surged to over US$400 million in the initial week.
The project was conceived by Andre Cronje, a prominent South African software developer who enjoys a significant standing among the DeFi community. Andre’s contributions extend to other notable projects like the Fantom Network among others.
In February 2020, Yearn Finance fell victim to a hack, prompting Andre to announce his departure from the project due to community backlash. Presently, many decisions and direction hinge on the collective voice of YFI holders.
Risks of YFI
Like an investment in other crypto assets, there are some general risks to investing in YFI. These include: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to thestatement.
In addition to these general risks, an investment in YFI is subject to the following specific risks:
- YFI operates using smart contracts, which have an association with vulnerabilities and security breaches. Despite undergoing successful audits by well-regarded third-party entities, it is essential to acknowledge the existence of inherent risks. Furthermore, the project’s future trajectory hinges on the decisions made by a global community of YFI token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with YFI. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.
The YFI community and the aforementioned founder are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of YFI have no recourse to YFI founder, community, or Uphold if YFI declines in value for any reason.
Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.
Uphold’s Evaluation Process
Prior to listing YFI on the Uphold Platform, Uphold performed due diligence on YFI and determined that YFI is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following:
- The creation, governance, usage, and design of YFI, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of YFI.
- Any marketing materials put forward by the YFI social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with YFI, including any code defects, security breaches and other threats concerning YFI and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
- Legal and regulatory risks associated with YFI, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of YFI.
Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
Uphold users should read thestatement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.
Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following. Please also review the for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and statement.
Last updated on June 21, 2023.
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