YFI holders govern the Yearn ecosystem and are eligble to receive a portion of protocol profits. Therefore, YFI represents a right to govern the platform and a claim on its earnings. Profits are obtained from each of Yearn's products through a governed fee structure.
In order to claim profits, YFI holders stake their tokens into the Governance contract. Profits are periodically sent to this contract from the Yearn Treasury Vault, which temporarily holds profits before distribution to stakeholders. Profits are sent to the Governance contract after the Treasury Vault has accrued a $500,000 reserve; this reserve is used to pay for various operational expenses, including developer compensation and community grants. The amount retained in the Treasury contract before profits are sent to the Governance contract are subject to change by YFI holders. Profits are distributed as yCRV tokens.
In order to vote on a proposal, YFI holders must be staked in the governance contract. Currently, users of the YFI Vault (i.e. yYFI holders) are also eligible to vote. To lessen the burden of fees on smaller holders, Yearn governance decided to migrate to off-chain voting hosted by Snapshot. Snapshot is an off-chain gasless multi-governance client with easy to verify and hard to contest results. It makes creating and voting on proposals free with similar benefits to on chain voting. Finding previous / active polls and casting your vote is easy—just head to the Yearn Snapshot Portal.
The staking portal can be found here.