Yearn.finance’s governance token – YFI – has been subjected to immense volatility throughout the past few days and weeks, which has come about due to conflicts within the community and weakness across the entire DeFi ecosystem.
This downtrend that has sent the cryptocurrency from highs of over $40,000 to recent lows of $16,000 came about due to a combination of different factors.
One such event that contributed to this was the recent Eminence imbroglio, in which users rushed into an uncompleted smart contract being developed by Yearn founder Andre Cronje.
Despite it being well known that minting tokens from an uncompleted smart contract can be incredibly risky, users who lost their money due to the contract eventually being exploited still aimed their frustration at Cronje.
This compounded the technical weakness that the cryptocurrency had been seeing as a result of the market-wide downturn, eventually leading to a capitulatory selloff down to lows of $16,000.
One analyst is noting that lower yields on YFI-related yield farming opportunities is also removing the incentive to keep tokens off of exchanges.
As such, it may soon bear witness to heightened volatility in the days and weeks ahead.
Yearn.finance’s Price Rebounds from Recent Lows
At the time of writing, Yearn.finance is trading up just under 10% at its current price of $20,400. This marks a massive upswing from its recent lows of $16,000 that were set just a couple of days ago when it faced a capitulatory selloff.
The rebound from these lows has been significant and suggests that it was severely oversold at this time.
Now that it has posted a “v-shaped” recovery, it may be poised to start reversing its downtrend and moving higher.
Analyst: YFI Being Moved into Exchanges Could Perpetuate Volatility
While speaking about Yearn.finance’s current outlook, one analyst alluded to imminent volatility, explaining that more tokens will likely be moved to exchanges as…