A DeFi native team, experimenting with a protocol with restructuring governance and digital money. The features of this electrifying protocol are listed below:
- an elastic supply to seek eventual price stability
- a governable treasury to further support stability
- fully on-chain governance to enable decentralized control and evolution from Day 1
- a fair distribution mechanism that incentivizes key community members to actively take the reins of governance
Elastic supply crypto, which manages the supply in response to the market conditions, targeted $1 per YAM. The protocol used an existing elastic supply model such as Ampleforth to provide stability. A segment from each supply expansion was used to yCRV and add that to the YAM treasury, controlled via YAM community governance.
Experts were questioning as the code was UNAUDITED and $460 million was locked in the first 17hours of the launch of the yield farming protocol -YAM.
The hype of the Yam was real as the protocol was the amalgamation of various other projects, namely, elastic supply inspired by Ampleforth, fair distribution as Yearn Finance, and on-chain governance of Compound Finance.
On 12 August afternoon, Yam Finance developers revealed a bug in the smart contract. The team was crystal clear about the experiment and they also mentioned that they created the YAM Protocol in just 10 days from scratch. Along with this, the team also mentioned that no 3rd party audit has been done on the YAM contracts, regardless of the warning, $76 million was invested within an hour of the launch.
Though the YAM token was supposed to be equal to $1 at all times, it hit an all-time high of $167.72 on the same day. And as soon as the bug was revealed by the developers, the token collapsed after the announcement.
- YAM had $500 million assets under lock within a few hours of its launch.
- Even the team warned about the protocol as it was not audited by external auditors, yield farmers invested in the project.
- The coin was exposed to a bug within its rebase function, which led to lost control of its on-chain governance feature.
- Nearly $750,000 yCRV tokens stored in the project’s treasury are lost according to the team.
The YAM team had good intentions regardless of what happened. This “Experimental” project is a good example of highlighting the importance of an “External Audit”. Programming DeFi applications are tricky! Even an experienced developer tends to make silly mistakes while building a complex application.
The YAM team threw a baggy application and the investors did not care about the consequences, even though the team mentioned that the code was not audited.
Don’t be like YAM! The mistake has been made but you can avoid it.
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