Victor Ugochukwu · Dec 14, 2020 . 5min read
DeFi Craze Leads Yield Farmers to Deposit $76M in Yam’s Unaudited Contract in 1 Hour
Yield farmers have made over 2000 transfers into YAM's contract address with over $76M in token deposits
By Victor Ugochukwu · Aug 12, 2020 . 8min read
Just like the ICO days of 2017 and the IEO boom just a few years later, the DeFi craze is not slowing as yield farmers rush to deposit up to $76M in Yam which is presently unaudited contract all within one hour of launch.
Project Yam describes itself as an experimental protocol mashing up some of the most exciting innovations in programmable money and governance. The team models it after the elastic supply of Ampleforth. Additionally, Yam features a governable treasury to support its $1 stability goal further. Also, it allows fully on-chain governance for a decentralized protocol.
As per a Medium blog post, Yam rolls out a token distribution for interested community members. It says:
Rather than allocating a portion of the supply to the founding team, YAM is being distributed in the spirit of YFI: no premine, no founder shares, no VC interests — simply equal-opportunity staking distribution to attract a broad and vision-aligned community to steward the future of the protocol and token.YAM Medium blog
However, there’s a catch. YAM token distribution will happen in 8 staking pools which the Medium blog outlined. These tokens are COMP, LEND, LINK, MKR, SNX, WETH, YFI and ETH/AMPL Uniswap v2 LP tokens. To get a piece of YAM, liquidity providers must provide one of the eight tokens in one of the pools.
And just like the ICOdays, funds keep rolling in tokens from the liquidity providers. They are depositing into Yam’s smart contract non-stop. According to a publication by The Block, yield farmers deposit has crossed over $76M just within an hour of Yam announcing its launch.
Yield farmers seem to be throwing caution out of the window with as much deposit as $76M even after a disclaimer by Yam.
Surprisingly, this is happening even after the Yam’s team issued a disclaimer. The team notifies that its project is still yet to be audited. The post reads
…Nothing approaching the rigour of a formal audit has been conducted at this time. This was a 10-day project from start to launch. We STRONGLY urge caution to anyone who chooses to engage with these contracts and think a proper professional audit would be highly advisable if this project gets any meaningful use.
While investors are seeking to farm their yields, Emilio Frangella, a lead smart contract developer, decided to conduct an independent audit on Yam’s contract address. He tweeted his findings in a thread
In summary, Emilio said,
Changes to the original contract are minimal and mostly related to configuration or small improvements on the reward distribution. The changes don’t introduce any security risk. The contracts are immutable, and the governance can only potentially change the reward emission.Emilio Frangella
AMPL’s sudden shoot up and YFI possibly fuelling this craze
However, it’s not too surprising judging by the rate at which AMPL token grew within June and July. In fact, yield farmers regarded it as DeFi’s darling for its explosive growth. Yield farming which Vitalik Buterin describes as “unsustainable” continues to attract huge interest. It’s most likely what is fueling the craze behind Yam’s surprising explosion just within hours of launch.
As at the time of this publication, YAM’s contract shows investments are still flowing in. Yield farmers have made over 2000 transfers into YAM’s contract address.