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Just when you thought yield farming couldn’t get any crazier, the sector is now on X games mode.
YAM: An Experiment in Fair Farming, Governance, and Elasticity
August 11th 2020
72 Retweets328 Likes
Here’s what you need to know about DeFi’s latest farm.
*You’re reading one of our free pieces. We drop an article like this every Tuesday, however only paid subscribers get access to all of them. For $5/mo, the amount of alpha to be gained is simply unparalleled.*
Note: YAM contracts are currently unaudited. What we’re about to discuss is extremely risk and about as far down the DeFi rabbit hole as you can go. Proceed with caution and be aware that we are in uncharted territory.
What is YAM?
What happens when you combine a YFI-like no-premine, no ICO, equitable distribution with Ampleforth supply rebases which drove AMPL to be the most liquidity pool on Uniswap? You get YAM.
YAM is the governance token of Yam.finance – a platform with no purpose other than to farm YAM by staking popular DeFi tokens. 10% of the daily rebase is used to purchase yCRV (interest-earning stablecoins) and seed a yield farming treasury.
There are currently 8 Yam pools, each featuring 250k YAM in rewards over the first week. These pools are COMP, LEND, MKR, SNX, LINK, YFI, WETH and ETH/AMPL LP tokens. Users simply stake any of the tokens above, and earn YAM in return.
For our YAM farmers out there, here are some good tools to keep track of yields:
Underpinning YAM are rebases every 12 hours, meaning the supply contracts and expands by trying to reach a $1 peg. This phenomenon is what drove AMPL’s marketcap by more than 500% in the past month once 4chan got wind of being able to hold extra tokens earned from rebases.
First things first, the Yam team very blatantly states that YAM has no value. Right now, you literally can not use it to do anything. The goal is that this change with governance, but this is purely a meme-driven opportunity.
Just like YFI (which also stated it has 0 value), this doesn’t seem to be stopping anyone from farming.
$YAM TVL = $200 Million Best performing pool – $AMPL
Hourly ROI 1.60%
APY 14049% Worst performing pool – $WETH
Hourly ROI 0.263%
August 12th 2020
8 Retweets43 Likes
The supply of YAM is initially set at 5M tokens, split as follows:
2M to YAM farmers over the first 7 days
3M to YAM LPs for the yCRV/YAM Uniswap Pool
As capital rushed in to be the recipient of the earliest yield, other tokens are getting caught in its wake.
COMP – Yam’s most profitable pool – is now up more than 30% on the day as farmers race to farm yam.
Tomorrow, the YAM/yCRV liquidity pool will open with another wave of degens.
At this point, all we can say is either watch in amazement (or disdain) or try your hand at farming with the full intent that you literally putting all of your capital on the line.
To synthesize, YAM’s potential is simply unpredictable. While it lacks the X factor that was Andre with yEarn and YFI, the DeFi-native creators of YAM have certainly captured the sector’s attention, and many are likely to follow suit.
This rise of YAM comes in tandem with meme-driven tokens like Tendies (TEND) and Taco Coin (TACO) both of which tie in novel DeFi primitives with a cheeky name to really fuel the meme-driven nature of what crypto is best known for.
Regardless of if you grok this, at least now you can say you’ve heard of YAM. If you’re lucky, maybe you’ll even harvest one from the digital fields.
Until next week, good luck with your honest work!
Disclaimer: YAM is extremely risky. We do not recommend new readers go anywhere near YAM. This is meant for highly knowledge participants and even they are having trouble understanding this. Please DYOR and never invest more than you are willing to lose.