> ## Documentation Index
> Fetch the complete documentation index at: https://docs.cove.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# coveYFI

> A liquid locker for YFI

<img className="block dark:hidden" src="https://mintcdn.com/stormlabs/qew6jsW71Sw-JZvn/images/headers/light-coveyfi.svg?fit=max&auto=format&n=qew6jsW71Sw-JZvn&q=85&s=81b8633fd46fab8f65332ab55f6f157c" alt="coveYFI Light" noZoom width="1065" height="383" data-path="images/headers/light-coveyfi.svg" />

<img className="hidden dark:block" src="https://mintcdn.com/stormlabs/qew6jsW71Sw-JZvn/images/headers/dark-coveyfi.svg?fit=max&auto=format&n=qew6jsW71Sw-JZvn&q=85&s=72414e6c2e367df2317beb7e9e20eeea" alt="coveYFI Dark" noZoom width="1065" height="383" data-path="images/headers/dark-coveyfi.svg" />

**coveYFI** is Cove’s liquid locker for **YFI**. **YFI** deposited into Cove is perpetually locked for **veYFI**, thus increasing the protocol's ownership of **veYFI** and Yearn gauge voting power.

<Frame caption="How coveYFI works">
  <img src="https://mintcdn.com/stormlabs/qew6jsW71Sw-JZvn/images/coveyfi-explainer.svg?fit=max&auto=format&n=qew6jsW71Sw-JZvn&q=85&s=754dc021a0735ad68965a1236bf2ec35" alt="coveYFI Explainer" width="1200" height="675" data-path="images/coveyfi-explainer.svg" />
</Frame>

coveYFI stakers receive yield from:

* 95% of early exit rewards
* 95% of boost forfeit rewards
* 5% performance fee on harvests
* \$COVE liquidity mining

### **What is a Liquid Locker?**

A Liquid Locker is an innovative financial instrument embodied in a smart contract designed for the decentralized finance (DeFi) ecosystem. It enables participants to obtain and trade liquid tokens—such as **coveYFI** in this context—that represent ownership of locked governance tokens, specifically **veYFI**, without directly locking their **YFI** tokens.

### Key Features and Benefits

* **Liquidity Preservation**: Unlike traditional staking mechanisms where locking governance tokens reduces market liquidity, Liquid Lockers allow users to maintain liquidity. Participants can trade their **coveYFI** tokens, allowing users to exit positions if desired.
* **Enhanced Accessibility to Protocol Incentives**: Users benefit from protocol emissions and other incentives associated with holding governance tokens (**veYFI**) without the need to lock their assets for extended periods. This system democratizes access to yield-generating opportunities within the protocol, such as those offered by Yearn.
* **Risk Mitigation**: By facilitating the trade of **coveYFI**, users can mitigate the risk associated with the volatility of the underlying **YFI** tokens. They gain the flexibility to enter and exit positions according to market conditions, without being tied to lock-up periods typically required to participate in governance or to earn protocol emissions.

This mechanism ensures that while the governance tokens are locked and contributing to the protocol's security and decision-making processes, users retain the flexibility and liquidity.

### coveYFI/YFI Curve Pool

A coveYFI/YFI Curve pool has been created
[here](https://www.curve.finance/dex/ethereum/pools/factory-stable-ng-152/deposit/).

Liquidity will be incentivized in future epochs.