Key Insights
- Yearn.Finance (YFI) recently added support for Arbitrum, a Layer 2 network for Ethereum
- This integration is set to aid Yearn Finance’s growth by reducing transaction costs and transaction fees involving Ethereum-based tokens
- Other DeFi platforms that added support for Arbitrum include Uniswap and 1inch
Yearn Finance, the 14th ranked DeFi protocol by total value locked, recently announced its expansion into the Ethereum-based Layer 2 solution Arbitrum. With this expansion, Arbitrum became the first Ethereum Layer-2 to be integrated by the DeFi protocol.
Yearn Finance Integrates with Arbitrum
Yearn Finance is a platform for yield-optimizing DeFi protocols anchored on the Ethereum blockchain. The platform’s primary goal is to maximize returns on your cryptocurrency by arbitraging different lending platforms in search of the best available yield. Yearn Finance also aids shifting between protocols like dYdX, Aave, and Compound, as interest rates differ between these platforms.
The protocol’s decision to support Arbitrum will allow users to transact Ethereum-based tokens without moving those coins on the Ethereum blockchain itself. The project claims that the integration with Arbitrum could drastically reduce gas costs or transaction fees by a factor of 10.
Yearn Finance’s Twitter account revealed on February 24 that it had deployed its initial instruments to Arbitrum.
Drumrollup please… 🥁
Yearn has launched on Arbitrum.
Just four months ago, Yearn added support for its second blockchain: Fantom.
Today, Yearn adds its first Ethereum L2: @Arbitrum.
— yearn.finance (@iearnfinance) February 23, 2022
What Difference Does Arbitrum Bring?
Arbitrum is an inaugural Ethereum Layer-2 solution that Yearn Finance will add (YFI). This integration comes just a few weeks after the release of Yearn’s vaults on Fantom.
The team revealed that the reasons behind choosing Arbitrum were that the solution is Ethereum’s largest L2 with close to $3 billion in total value locked. Furthermore, the team claims that the deployment will bring gas costs by almost ten times. That said, major crypto exchanges like FTX and Binance will support Arbitrum’s deposits.
Additionally, the project says that the decision to support a Layer 2 network strengthens its ‘first true love: Ethereum.’ In its inaugural release, Yearn Finance noted that it offers a single vault dubbed Curve’s triCrypto. It also said that it accepts liquidity in three tokens, namely WBTC, WETH, USDT.
Some other DeFi platforms that added support for Arbitrum include Uniswap and 1inch. Notably, Uniswap began adding support for the Layer-2 solution in May 2021, while 1inch added support for Arbitrum around September last year.
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