Yam Finance, a project that only lasted for two days, has all but died after its market capitalization collapsed from $60M to virtually nothing in less than an hour. The decentralized-finance project ultimately succumbed to a fatal bug in its code and is now viewed as a warning to everyone in the cryptocurrency space who has been euphorically yield farming and throwing money into any DeFi project.
In the span of only 35 minutes, the market cap of YAM dropped from $60M to zero, as per data sourced from CoinGecko.
At its peak, the price of one YAM token was $167. Said price peak occurred approximately one day ago, from the time of this writing.
What happened to YAM?
YAM launched on Tuesday of this week as a yield-farming protocol that featured tokens meant to remain closely aligned with the price of the United States dollar. This was supposed to be achieved via an expanding or contracting supply.
However, due diligence was not properly conducted on the project and its code had not received a solid audit before hungry yield farmers — including BitMEX CEO Arthur Hayes — began investing in and promoting the project. The unaudited code quickly revealed a significant bug that saw the protocol continuously print tokens that ultimately prevented proper governance from token holders.
Despite a last-minute and desperate attempt to save YAM, the project died only days after it launched.
i’m sorry everyone. i’ve failed. thank you for the insane support today. i’m sick with grief
— belmore🍠 (@brockjelmore) August 13, 2020
Even though the project was, objectively, a total failure, attempts will apparently be made to launch a second version after the initial attempt to rescue the first version. Called YAM 2.0, the revamped yield-farming project aims to fix the flawed distribution mechanism and explained in a blog post:
The distribution mechanism and events of the past 36 hours have brought together an immensely special community around YAM. We believe this community deserves the chance to persist.
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