1 hour ago · 2 min read
Ethereum › DeFi
What is Yam? The YFI-AMPL clone with lures of 10,000% returns
Yam, a new DeFi project put together in ten days with no audit, guaranteed risks, and never-seen-before returns locked upwards of $180 million hours after launch on August 11.
It was created by five individuals at the start of August and the tokens are fundamentally worth zero. But that hasn’t stopped yield farmers from chasing the YFI-esque promises of 10,000% annual percentage yield (APY) on locking up the tokens on liquidity pools.
— Linda Xie (@ljxie) August 12, 2020
It is the latest in line of a bunch of “governance” protocols making big returns in the crypto market. It’s essentially a game of musical chairs with the early “adopters” getting big returns and a bunch of people left with bags of hopium in the end.
YAMs = Ponzinomics of AMPL + Chad launch of YFI + Meme math of Tendies
— Ryan Watkins (@RyanWatkins_) August 12, 2020
A post on the topic yesterday said the project brings “mashes up” some of the most exciting innovations in programmable money and governance — referring to it taking the best (or worst) of Compound, Yearn.Finance, and Ampleforth.
So here’s a primer on Yam: For starters, the token has no inherent value and takes Ampleforth’s (AMPL) rebase features to promise a better token economy.
Rebase eligible to begin under following conditions:
– init_twap() 1 time function called
– 12-hour delay
– activate_rebasing() 1 time function called
– within rebasing windows of 8AM-9AM or 8PM-9PM UTC
The first rebase should take place approximately 8PM UTC tomorrow, 8/12. https://t.co/m1msSFRfLz
— Yam Finance (@YamFinance) August 12, 2020
Other buzzwords include, “fully on-chain governance to enable decentralized control and evolution from Day 1.”
YAM is an elastic supply cryptocurrency, which expands and contracts supply in response to market conditions, initially targeting 1 USD per YAM, said the blog.
“This stability mechanism is supplemented by one key addition to existing elastic supply models such as Ampleforth,” it added, adds a portion of each supply expansion is used to buy yCRV (a high-yield USD-denominated stablecoin) and add it to the Yam treasury, which is controlled via Yam community governance.
The blog, interestingly, noted:
“We have built Yam to be a minimally viable monetary experiment, and at launch, there will be zero value in the YAM token.”
YAM future in the hands of holders
The future of Yam is wholly in the hands of YAM holders, who help determine and update the functionality of the Yam protocol, including oracle usage, rebase functionality, inflation, incentive design, the Yam treasury, it added.
YAM tokens surged to trade over $120 at the time of writing, as per data on Coingecko. One commentator on Twitter explained why/how did it surge as much:
yield farmers can get 10000% apr on comp at yam, you think people arent going to market buy $comp and send it to valhalla right now?
this things gonna explode
— ???Farmer Bluntz??? (@SmartContracter) August 12, 2020
But concerns remain. The project is valueless and a great experiment in decentralized platform governance, with users holding the power to make or break the protocol’s immediate and long-term future.
It’s also not for newcomers:
please dont be the poor fucker who loses more money than they can afford to lose on an experimental mashup of all the defi things that was started 10 days ago.
— Taylor Monahan (@tayvano_) August 11, 2020
With new projects seemingly trying to capitalize on the DeFi frenzy daily, expect a lot of new scams and innovations alike in the coming months.