Year of DeFi. After Compound, Yearn.finance, a new DeFi protocol called Yam Finance attracts people’s attention and money.
At 19 pm 11st August, Yam Finance started its first round of liquidity mining $YAM token. 2million $YAM token was distributed to 8 staking pool equally - COMP, LEND, LINK, MKR, SNX, WETH, YFI, and ETH/APML Uniswap v2 LP. They are all hot DeFi tokens.
At 19 pm 12th August, it started its second round of liquidity mining. The total amount of token pool for the 2nd round is 3million. The first week is 1.5million, and then the amount will be reduced by 50% every week thereafter. There is only 1 staking pool for the second round, which is YAM/yCRV Uniswap v2 LP.
In less than 2 days, Yam Finance volume reached over $1B USD. Its token price $YAM went up from $66 to $167(ATH) and then dropped to $2. The trend of Yam Finance $ YAM token price and its user/transaction/volume data seem to be in the opposite direction. Why did this happen? Leave your opinions in the comment area below.
(From https://www.dapp.com/app/yam-finance, the black line shows the token price)
Yam Finance protocol seeks to create
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
So we can see that Yam Finance focuses on decentralized governance, fair profit distribution, and token price stability. $YAM is an elastic supply token. According to the market demand and supply, its target is to keep $YAM price at 1 dollar. Is that the reason why $YAM price drops so much and will it continue to drop further?
Just a few hours ago, Yam Finance has overcome a serious code error.
The future of Yam Finance was abruptly thrown into question when a bug in the protocol’s code resulted in excessive YAM reserves being minted — making it “impossible to take any future governance actions.”
Relying on the power of the community, Yam Finance quickly asked for community support by offering rewards to YAM miners and token-holders who were willing to pledge their tokens toward a pool of 160,000 coins to recapture governance over the protocol before the 7 am UTC deadline.
Yam Finance initiated a save $YAM project on the website. With the huge supports from the community, $YAM surpassed its target.
But passing the proposal does not mean the team saved $YAM successfully. Belmore, the core developer of Yam Finance posted in his Twitter to admit the failure of trying to save Yam Finance.
The support campaign to get holders to vote to save Yam Finance turns to be ultimately futile. The bug created a huge amount of new $YAM and sent it to the treasury contract, it now holds the vast majority of all tokens, which is much more than the amount of $YAM tokens put into the support voting pool. “This means the available $YAM on the market are not enough to reach quorum,” said Cronje, DeFi developer and founder of the yEarn protocol.
Unfortunately, the result is that both the governance and the treasury are now “bricked” and cannot be accessed. The governance contracts are being “permanently broken” and $750,000 worth of Curve tokens being locked from use.
This accident of Yam Finance caused a significant price drop of DeFi tokens.
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