Victor Ugochukwu · Dec 14, 2020 . 5min read
Within 48 Hours YAM Rose to $167 and is now Gone
YAM just within 48 hours of launch, racking as much as $600 million in TVL, is now gone
By Victor Ugochukwu · Aug 14, 2020 . 6min read
When Vitalik Buterin Ethereum’s poster boy said people are underestimating smart contract risk on Laura Shin’s podcast because of the tremendous rise in DeFi, not so many understood what he was saying. After the 2016 DAO Hack leading to the subsequent hardforking of Ethereum, Vitalik’s opinion is not one to be jettisoned without really dissecting it.
With the continued increasing interest in DeFi, YAM was created and modelled after the elastic supply of Ampleforth. The latter, of course, brought considerable gains to yield farmers on its nearly two months rally. But, YAM just within 48 hours of launch, racking as much as $600 million in TVL, is now gone. The team says it was due to a severe bug in the rebase logic causing the contract to mint decillions of YAM to the governance vault. This apparently meant no votes could pass because the vault could never reach a quorum.
And just like the team rushed and cooked YAM’s contract before its public release, without even any external audit, the team kept issuing updates after the bug was found. In fact, one of them was SAVE YAM!. Deploying a new governance contract on the mainnet, it encouraged people to act promising to grant lost rewards + a bonus to those who worked to save the system.
The Bug and the Dump
And then just like Thanos in the Avenger series, the bug proved inevitable. As the team announced the bug, the flash dump took its course. As data from Coingecko shows, YAM practically went from an all-time high of $167.66 to $0.86 as at publication time.
The Blame and Praise on YAM’s Failure
Typically, the blame is flying everywhere, most specifically directed at the team. Belmore, the founder of YAM, even tweeted:
Others are just making a meme out of the situation as a Twitter fellow tweeted,
However, a few notable names think the YAM experiment was not all a failure.
Anthony Sassano, founder of The Daily Gwei in a Substack post said:
“Even though the ‘SAVE YAM!’ initiative failed, it was still an amazing “experiment” to watch play out in real-time. If you peel back the onion a bit, you would have realised that a global community that didn’t exist ~48 hours ago were self-organizing and coordinating to save a brand new protocol. This is one of Ethereum’s superpowers – it is a global coordination machine like no other.”Anthony Sassano
Whether YAM will come back or is of little significance, the major thing of note is the fact that whether DeFi is a bubble or not has a lot to do with some of these risks as Vitalik Buterin pointed investors do not consider.