Yearn – the popular DeFi yield aggregator –  has launched an automated market-maker (AMM) that allows users to deposit single-sided liquidity. If successful, this new AMM will enable liquidity providers (LPs) to earn yield on their idle assets while minimizing impermanent loss common in 50/50 pools on DEXs like Uniswap.

According to yearn founder Andre Cronje’s Medium post, the v1 release of ySwap will focus on Aave yield assets. Depositing Aave aTokens will enable LPs to capture both the interest generated by lending on Aave as well as the underlying AMM swap fees.

While the front-end of ySwap is purposely simple for now, dashboards will soon be released to monitor deposits, AUM, and yields. ySwap tackles the issue of impermanent loss by giving LPs aUSD for the dollar value of their loss should the market move against them and they have less than what was originally deposited. To learn more about how aUSD is created and the mechanics of ySwap read the official documentation here.

Why Should I Care?

The ecosystem the yearn (YFI)  community has built out in just a few months is truly something to behold. At this pace, it seems like there isn’t a single corner of DeFi that yEarn won’t be involved with in one way or another.

Users can now earn, swap, and lend all in a decentralized manner without having to interact directly with anything other than Seasoned teams that have been in crypto for the long haul are now even publicly seeking partnership and collaboration with the YFI community.


Concurrently, there is also a governance proposal outright that would ensure that no more than 30k YFI can ever be minted, making YFI one of the most scarce crypto assets ever distributed. To no one’s surprise, the future looks bright for and the YFI token holders.

To stay up with yearn, follow the project on Twitter.