YAM Holders Approve Decision

YAM Holders Approve Decision To Save $ 600 Million Protocol

UPD3: Yam Finance protocol will restart on a new contract after a critical bug is found.
UPD2:
Yam Finance developer Brock Elmore wrote: “I apologize to everyone. I have failed. Thanks for your incredible support today. I am burning with melancholy. “Thus, Elmore confirmed that he was unable to fix the contract, and the yCRV tokens were added to Yam Finance reserves with all the negative consequences described below..

YAM holders no longer have tools to manage the protocol. In addition, the $ 750,000 yCRV tokens in reserves are non-recoverable. Users can still freely withdraw staked assets and, if desired, sell the remaining YAM while there is still liquidity on the exchanges.

YAM’s price on Uniswap dropped to $ 0.60. Yesterday, before the re-denomination and recent events, the token was trading above $ 160.

UPD:
Despite the successful approval of the proposal, the developers asked users to withdraw assets from the YAM / yCRV pool on the Uniswap exchange. Their fears are related to the fact that they will not be able to launch the amended contract until the re-denomination scheduled for 11:00, which will again lead to excess tokens in the reserves. “We are urgently investigating a potential malfunction that could interfere with the execution of the offer,” they wrote.

Massive drama nearly played out over Yam Finance’s DeFi protocol this morning.

A bug was found in the code, which, as the developers themselves admitted, had not been audited. The problem was in the YAM denomination recalculation mechanism and resulted in the protocol issuing an excessive amount of tokens, which were then sent to the YAM Reserves contract address. Because of this, future actions to manage the protocol by YAM holders would be impossible. At the same time, nothing threatened the users’ assets.

After the first recalculation of the YAM denomination, the developers figured out that about $ 500,000 in yCRV tokens had been added to the protocol reserves. “If management is unable to submit a bug fix proposal before the second recount, no further management action can be taken as too much YAM will be in reserve. For this reason, no proposal will be able to collect a quorum “, – explained the developers.

Liquidity providers involved in YAM farming and other token holders were asked to vote by delegating 160,000 YAM and thus fix the defective function. For this they were promised bonus tokens, but until the last minutes the number of votes was insufficient.

Voting started on Wednesday evening and was supposed to continue until 10:00 Moscow time. After 09:00, the developers reported that there were not enough votes. Nevertheless, during the last hour, the token holders have become noticeably more active and have almost doubled the target..

The Gate.io exchange independently decided to transfer client YAMs to delegation and thus vote for the proposal. Users who did not want their assets to be used in voting had to notify the exchange about this separately.

In fact, two votes took place. The first required 35,000 YAM and allowed the proposal to be submitted directly for consideration, and as a result of the second, changes to the YAM management contract were approved, which would protect it from a bug. This solution is temporary, while the longer term will be implemented by the developers later..

According to YAM Analytics, in the first 36 hours of the protocol’s existence, liquidity providers have already contributed more than $ 600 million in assets..

BitMEX CEO Arthur Hayes said on Wednesday that he too has joined YAM farming and wished “a long life to the DeFi bull market.”.

Yam Finance combines elements of the yEarn.finance and Synthetix DeFi protocols with the Ampleforth “adaptive money” model. YAM’s price will always aim towards $ 1. This is implemented using the mechanism for recalculating the denomination of the token, which removes or adds them to circulation, using the assets on the accounts of all holders. In other words, an increase in the number of tokens leads to a decrease in the price of each individual token, and if the rate falls below $ 1, the protocol will try to raise it by removing tokens from the accounts of all holders.

The possibility of receiving tokens without additional investments while increasing their rate is certainly attractive for liquidity providers and investors. However, as the recent example of Ampleforth has shown, the situation can quickly change in the opposite direction when the holders of “adaptive money”, not wanting to withdraw tokens by the protocol, will sell them in the market, thus increasing the pressure on the price until the next upward correction. In addition, the use of DeFi-protocols is associated with the “risks of smart contracts”, about which the co-founder of Ethereum Vitalik Buterin recently warned and which have already been demonstrated on the example of Yam Finance itself..

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