Yearn Finance (YFI) emerged as one of the best performers in the crypto market this calendar week, rallying past over 46% in just four days to reach a two-calendar week high above $29,100.

YFI/USD daily price chart featuring its four-day bull run. Source: TradingView

The gains surfaced primarily as Yearn Finance revealed that it has been buying back YFI en masse since November in response to a community vote to meliorate the YFI token's economics. The decentralized nugget direction platform purchased 282.twoscore YFI at an average toll of $26,651 per token — a total of over $seven.fifty 1000000.

Furthermore, Yearn Finance noted that it has more than $45 million saved in its Treasury and has "stronger than ever" earnings. As a result, information technology would — in the time to come — could deploy its income to buy back more than YFI tokens.

Adam Cochran, a partner with activist venture fund Cinneamhain Ventures, noted that Yearn Finance makes almost $100 million per yr in simply fees collected from Vaults, its flagship smart savings account service that maximizes the value accrual of deposited digital assets.

The analyst further highlighted that Yearn had attracted more than $5 billion in total value locked (TVL) against a marketplace capitalization of $781 1000000. That being said, the Yearn Finance protocol earns one of the highest fees per TVL, giving it enough liquidity to sustain its token buyback strategy in the future.

The total value locked inside Yearn Finance vaults. Source: DeFi Llama

YFI undervalued

Cochran further compared Yearn Finance'due south profit-to-sales (P/Due south) and turn a profit-to-earnings (P/E) ratios with another "payout-based" protocol Curve, highlighting that YFI remained undervalued compared to Bend's staking token, CRV.

In item, the P/S ratio indicates that how much investors are willing to pay for a visitor's stock based on its sales per share. The P/E ratio shows investors' decision to purchase a stock based on the company's by or future earnings. In both cases, a lower reading indicates an undervalued stock.

"Their P/S ratio is iii.6x and their P/East is seven.9x," wrote Cochran most Yearn Finance, adding:

"Those numbers for other payout-based protocols similar Curve are 71.9x and 143x, respectively. Then around times the multiple valuations for someone who has fees on."

YFI to $40K adjacent?

While Yearn Finance'southward decision to buy back over $seven.50 million worth of YFI helped boost its prices, the cryptocurrency as well received an additional upside boost from a historical accumulation range.

The area between $xviii,500 and $20,000 has been attracting buyers on each YFI price dip since Nov 2022. It also held upward against bears in September 2022, leading to a price rebound toward $xl,000.

YFI/USD three-day price chart featuring Fakeout range. Source: TradingView

If YFI holds the $18,500–$20,000 range every bit back up, and further rises above $24,580, or the 0.786 Fib line of the Fibonacci retracement graph in the chart in a higher place, its adjacent upside target volition be $40,000, a level coinciding with the 0.618 Fib line.

Related: Equally Yearn.Finance's yield vaults grow, 'crop' projects define boundaries

Popular crypto trader Cuban noted that YFI's fully-diluted valuation (FDV) is under $i billion, which is "criminal considering the potential and the team behind." He added:

"Macro crypto wise, I believe we have a large Q1 coming upwardly fundamentally and a lot of people gonna be left on the sidelines later de-risking EOY."

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