Weekly Recap: YFI V3, Blur Drama, and More

Two of the most prominent narratives forming within DeFi, liquid staking tokens (LSTs) and oracleless protocols, saw new additions this week: Yearn announced yETH, and Surge Finance launched on Arbitrum. Within the social and consumer sectors, controversy has arisen around NFT marketplace Blur as NFT prices continue to fall. In addition, Twitter has a new rival — Threads — launched by none other than Meta, and Arweave announced its Universal Data License enabling creators to define their own terms and conditions for content uploaded to the permaweb.

Yearn V3 & yETH

DeFi 1.0 is seeing renewed interest as leading platforms adapt and introduce innovative features to reinvent themselves. Not to be left behind, Yearn Finance has recently announced two exciting new product upgrades.

yETH

yETH is a liquid staking token aggregator by Yearn. It diversifies users' staked ETH across different liquid staking tokens, providing them with yETH in return. It also allows users to swap between the different liquid staking tokens (LSTs) for a fee, functioning somewhat like unshETH. However, a key difference is that the protocol parameters are governed by its yETH stakers, creating low governance risk. yETH stakers vote whether to include or exclude liquid staking protocols from the portfolio, and incentives are encouraged to sway their votes. Through this, yETH allows liquid staking protocols to reduce their fee for a subset of users in exchange for higher total allocation.

yETH imposes a fee of 10% for aggregation, which accrues to the protocol treasury. Despite this fee making yETH comparatively more expensive than other aggregators, Yearn's established brand and its reputation for managing high Total Value Locked (TVL) may still attract users who prioritize safety over costs.