Yam puts the key under the door – Yam Finance was one of the most iconic DeFi Summer protocols on Ethereum. However, in the absence of a tokenomics wobbly and following several attacks, the protocol is considering a permanent shutdown.
Yam Finance: the descent into hell
The protocol YamFinance was born at the beginning of August 2020 in full DeFi Summer. So, this one followed the trend of food name protocols. In practice, Yam Finance is a so-called protocol of yield farmingmaking it possible to generate a return on the assets deposited.
Quickly, it attracts many investors and sees its TVL explode. Thus, more than $600 million is deposited in Yam Finance pools. However, less than 48 hours after its launch, a critical bug is discovered in one of the protocol’s smart contracts. This fault led to a significant fall in the price of the YAM. This had then fallen from 170 to $0.57 in a few hours.
Two years later, while the protocol is struggling to keep up with the innovation proposed within DeFi, it is on the verge of a new drama. Indeed, on July 9, 2022, Yam was the target of a governance attack. Fortunately, this could be thwarted before irreversible damage was inflicted on the protocol.
At the time of the events, it only had a few hundred thousand dollars in its pools. Demonstrating top-down interest from users.
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Yam Finance goes out of business
Now, the community seems to have gotten used to the idea: Yam Finance will no longer be a big DeFi protocol.
Thus, on October 7, a proposal was submitted by a user on the Yam Finance governance forum. For simplicity, this proposal aims to use protocol treasury to buy back Yam tokens from holders.
“After years of efforts by Yam contributors in different and sometimes contradictory directions, we believe that Yam has reached a critical point where it can either continue on its downward trajectory (~97.69% value destruction vs. ATH), or allow token holders to redeem assets they rightfully own. »
In practice, this proposal suggests carrying out a repurchase of the YAM tokens around $0.207 to $0.25 per YAM.
Obviously, not all voices are in favor of this proposal. Some protocol members, including @Feddasunderline the fact that this proposal probably comes from users who bought Yam tokens recently when the price was at its lowest and especially below the proposed redemption price.
In addition, @Feddas reminds that they are working on two proposals (YIP-144 and YIP-200) aimed at stopping the flight of capital from the treasury. These two improvements would allow the protocol to spend less money than it earns and therefore generate value for the holders.
Anyway, it will be community governance to decide the fate of this proposal.
Let’s just hope that the decision does indeed reflect the community’s will. Indeed, many DAOs are sorely lacking in decentralization. In too many cases, a handful of individuals are able to decide for all voters.
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