Is DeFi really viable? Let's take a look at how Yearn outperforms traditional asset management giants

This article is sourced from The Defiant, authored by IntoTheBlock analyst Lucas Outumuro, and compiled by Perry Wang.

The DeFi leader Yearn Finance is rapidly transforming into an asset management giant. Driven by its thriving community, Yearn's fundamentals appear stronger than those of traditional financial peers.

After recently hitting a historic high of over $5 billion in total value locked (TVL), Yearn also broke its record for monthly revenue.

Source: Yearn Newsletter

In May alone, Yearn's revenue exceeded $10 million, with an expected annual revenue of $123.12 million. In comparison, new robo-advisory platforms like Betterment and Wealthfront reportedly have annual revenues of $50 million and $30 million, respectively—of course, these figures are from recorded data in 2019 and 2018, and unfortunately, there is no updated data.

Based on revenue generated per dollar deposited and valuation relative to its revenue, Yearn's performance is also significantly superior.

Yearn data estimated based on revenue and index data as of May 2021.

Source: IntoTheBlock, Yearn Newsletter, CoinGecko, MacroTrends, FinExtra, Growjo; Valuation data for Betterment, Wealthfront, and Blackrock are from 2019, 2018, and 2021, respectively.

Although the above comparisons are not entirely equivalent, it is worth emphasizing that this is the strong financial position Yearn has achieved in less than a year and a half since its inception.

Additionally, its pioneering human coordination approach means that Yearn can generate higher revenue with fewer employees.

According to YFIStats, Yearn currently has 21 team members, most of whom are anonymous, with a total payroll of $133,716 for the entire month of April. In contrast, new robo-advisory platforms Betterment and Wealthfront have 293 and 231 employees, respectively, while the world's largest asset management company, Blackrock, has 16,500 employees.

Source: IntoTheBlock, Yearn Newsletter, CoinGecko, MacroTrends, FinExtra, Growjo. Data for Betterment, Wealthfront, and Blackrock are from 2019, 2018, and 2021, respectively.

This means that, in terms of revenue generated per employee, Yearn's efficiency is several orders of magnitude higher, with expected revenue per team member reaching as high as $5.86 million this year.

A significant portion of the costs paid by the Yearn team goes towards the development of the platform and its strategies. Analyzing the protocol's GitHub profile, the commitment of the Yearn team and community is evident.

Data as of June 21, Source: IntoTheBlock's YFI social indicators

The growth of the Yearn developer community corresponds with the number of YFI holders. The number of YFI holders, like the protocol's TVL and revenue, has also recently reached new highs.

Regardless of the impact of the recent market crash, Yearn continues to grow in all aspects. Although Yearn rarely enters the spotlight of traditional media, its asset management platform has already surpassed new banks on several levels. Yearn is expected not only to achieve higher revenue than traditional financial institutions but, more importantly, to do so relying solely on a relatively small but growing user community.