What Does The New Merger Between YFI And Sushi Mean For DeFi?

Yearn finance joined forces with Sushiswap in order to enhance both protocols but what does the new merger mean for the entire DeFi space? Let’s find out in our cryptocurrency news today.

The latest DeFi collaboration could benefit the users that are looking for new and innovative projects and better security. SushiSwap and Yearn finance announced their plans to collaborate closely today and also share resources in order to create better services for the protocols and their users. Yearn announced a few other collaborations in recent days pooling resources from the different ends of the entire ecosystem. The collaborative activity showed the outline of the entire DeFi industry’s future but what does the new merger actually represent?

Yearn x Sushi 行ってきます https://t.co/0sYZowfXsf

— Andre Cronje (@AndreCronjeTech) December 1, 2020

Yearn Finance is the yield optimization protocol that became one of the most popular projects in the Defi Space and recently it announced a new partnership with SushiSwap. This partnership is the latest in a series of high-profile collaborations for Yearn. Andre Cronje, the founder of YFI announced the new relationship with SushiSwap with goals to enhance development and integration for both Defi offerings. Since the ownership for the protocols is decentralized among the supporters, the enhanced collaboration between these two is not actually a merger on acquisition but will have a positive impact on the entire industry as Cronje said:

 “I don’t have an answer on if these are mergers, acquisitions, partnerships, or collaborations. The simple answer is, a bit of each, the teams merge, the protocols leverage off of each other, vision is aligned and shared by all team members. This is something new that I don’t think fits into the boxes we have previously used.”

DeFi or decentralized finance, is a group of protocols that offer financial services like loans and interest on deposits without needing a bank or other money changing institutions. Instead, it relies on smart contracts, mainly on the Ethereum blockchain. The YFI/SUSHI collaboration will likely speed up and improve the development for both protocols as the teams work together to integrate different parts of the smart contract’s code design. This should help make the Yearn optimization strategy much more profitable while improving the capabilities and security of the SushiSwap automated market maker DEX.

SushiSwap was launched as a copy of popular decentralized exchange Uniswap by offering new features. The DEX suffered a slight crisis of confidence once the founder was ready to take off with the funds but then FTX founder Sam Bankman Fried took control of the protocol and helped it to transition into a new model. Yearn collaborated with other junior projects before and shared resources with the yield optimizing Pickle Finance and Deriswap as well as Cream.