Yield farmers excited about the recent decentralized finance (defi) project, Yam Finance, got a rude awakening after the token’s value plummeted in value to near zero. Yam Finance developers discovered a major flaw in the rebasing contract and at 4 a.m. ET, cofounder Brock Elmore tweeted that he was sorry he “failed.”
On Wednesday, well over $500 million funneled into the defi project Yam Finance. More than $120 million kept funneling in after the developers found a bug in the smart contract. After the bug announcement, the YAM token’s value dropped significantly as the token touched an all-time high of $167.66 per token. At the time of publication, the token is only worth $0.97 per YAM.
The token launched on Tuesday and almost immediately massive amounts of crypto got tossed at the yield farming platform. The tokens were supposed to keep value with the USD by using an elastic supply inspired by the Ampleforth defi project.
A lot of people complained that the codebase wasn’t audited and that raised flags for certain individuals within the community. The bug that was found was horrible and resulted in extra YAM being minted during rebasing periods.
After the project developers realized the codebase was not able to be saved after trying to lock 160,000 YAM, developers figured out the smart contract was bunk. During the early morning hours on Thursday, Yam Finance cofounder Brock Elmore tweeted about the situation. Elmore said:
I’m sorry everyone. I’ve failed. Thank you for the insane support today. I’m sick with grief.
The Yam Finance project is still one of the most trending conversations on social media and crypto-related forums. Crypto entrepreneur Bruce Fenton discussed the defi token situation on Thursday and said: “Your defi tokens are junk.”
“They are not a good form of money,” Fenton added. “You have no ownership of an enterprise. No rights to revenue. There is no real revenue. Governance is meaningless without rights. Total crap – often pushed by the same jokers who got rich on ICOs. Few understand this.”
However, not everyone agreed with Fenton’s observation in regards to defi tokens.
“No ownership of enterprise is how it goes for ANY utility token or ‘currency coin,’” the CEO of Trustswap Jeff Kirdeikis responded to Fenton’s tweet. “You’re gatekeeping what ‘has value’ here by saying only security tokens have value? Common. Owning BTC doesn’t give you ownership in enterprise or revenue either… Many people understand this,” Kirdeikis added.
What do you think about the Yam Finance project and the events that unfolded? Let us know what you think about this subject in the comments below.
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