Yam Finance has been abruptly buried in less than 2 days of action, following a failure in the rebasing portion of its code. $750,000 yCRV tokens are believed to be stuck in the protocol, indefinitely.
— Yam Finance (@YamFinance) August 13, 2020
The team has since released an update on their now-failed rescue attempt of the protocol and what comes next for the project.
Yam Finance broke all sorts of DeFi records, peaking at over $600 million in total locked value in less than 36 hours after launch.
How it went down
YAM has a “rebasing” mechanism, a price-stabilizing effect popularized by Ampleforth (AMPL). The rebasing mechanism is designed to alter the supply of the token in response to price changes, in order to keep the price near $1.
A bug was discovered in the YAM rebasing contract, which resulted in the minting of an excessive amount of YAM tokens – many more than expected.
The flood of new YAM tokens overflowed into the protocol reserve, where they became inaccessible and unable to be used in governance. Since such a large proportion of tokens were inaccessible, quorums could no longer be reached for YAM voting proposals, rendering the governance system useless.
The YAM rescue attempt
The YAM team didn’t go down without a fight, springing into action as soon as the bug was noticed at 6pm UTC, August 12th.
We need YAM farmers to act now.
If we are successful, YAM holders will very likely vote to reward those voters who help save the protocol.
Read on for more details. https://t.co/N56vSYgeVF
— Yam Finance (@YamFinance) August 13, 2020
A rescue attempt was put together in the form of submitting a bug-fix proposal, which if successful, would allow the team to intervene. Although the team believed they had the voting power to enact the proposal, they were soon informed that the rebase bug would block the proposal from going through.
Are funds safe?
An estimated $750,000 yCRV accumulated in reserves is now stuck due to the now-broken governance system.
Any user funds remaining in the Uniswap V2 YAM/yCRV pool should be removed as soon as possible to avoid further loss of yCRV tokens.
Fortunately, all funds staked on the YAM protocol are safe.
What comes next for YAM?
Things aren’t all over for YAM.
Despite their clear disappointment in the result of the project, the Yam Finance team is setting up a Gitcoin grant in an effort to professionally audit the YAM protocol.
If successful in raising funds, a YAM 2.0 protocol will be launched via a migration contract from the original YAM.
To stay up with the project follow them on Twitter!
"}" data-sheets-userformat="{"2":513,"3":{"1":0},"12":0}">
Alejandro is a New-Zealand based trader and writer who has been involved in the cryptocurrency and blockchain space since early 2016. Being extremely passionate about this emerging technology, he has written content for a myriad of projects and news outlets.
