At its core, Yearn Finance is built upon a set of smart contracts that interact with multiple DeFi protocols. The platform's key feature is the yVaults, which are automated yield farming strategies. These yVaults pool users' funds and allocate them across different protocols to maximize yield. The allocation of funds is determined by a sophisticated algorithm that takes into account factors such as interest rates, fees, and potential risks. When a user deposits funds into a yVault, they receive yTokens in return, which represent their share of the pool. These yTokens automatically generate yield through various strategies employed by Yearn Finance. The platform constantly monitors the performance of different strategies and reallocates funds accordingly to maximize returns. Users can withdraw their funds and accrued yield at any time, and the value of their yTokens will reflect the underlying assets' performance. Yearn Finance also introduced its native governance token, called YFI, which allows holders to participate in the platform's decision-making process. YFI holders can vote on proposals such as introducing new strategies, changing fees, or upgrading the platform's functionality. The decentralized governance aspect ensures that the community has a say in shaping Yearn Finance's future.