Alarm Sounds As Hot & Unaudited DeFi Potato, YAM, Locks USD 387m In Hours

Altcoins DeFi Investing
Last updated:
Journalist
Journalist
Sead Fadilpašić
About Author

Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

Last updated:
Why Trust Cryptonews
For over a decade, Cryptonews has covered the cryptocurrency industry, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships.

Apparently, decentralized finance (DeFi) is not risky enough for some people – the riskier the better(?). These have found a new thing to make seemingly popular, namely, pouring millions in an experimental and unaudited project.

Source: Adobe/Joe Gough

First, there was yield farming in the wild world of DeFi, spiced up with governance tokens, and now some yield farmers have turned from already, objectively risky business to a freshly launched DeFi project – YAM.

Since its debut on the Uniswap decentralized exchange yesterday, its price increased by 26%, to almost USD 88 (10:54 UTC), while trading volume surpassed USD 12m in less than a day.

Also, per Yamalytics, in 15 hours since its launch, total value locked into Yam Finance has climbed to USD 387m.

In comparison, total value locked into major DeFi platform Aave (LEND) stands at USD 530m today. The platform is fourth by this measure among DeFi projects tracked by Defipulse.com.

According to its team’s post from August 11, YAM is an elastic supply crypto, expanding and contracting supply in response to market conditions. It’s “an experimental protocol” in regards to governance, elasticity, farming, etc.

As for the audits, they wrote: “None. While the initial creators of the Yam protocol have made reasonable efforts to attempt to ensure the security of the contracts, […] nothing approaching the rigor of a formal audit has been conducted at this time.”

They warned of the crypto’s experimental nature on their twitter account as well:

US-based crypto research boutique Delphi Digital called this new entrant “the DeFi crop of the day,” stating in their post that it’s “essentially an AMPL clone.”

Ampleforth (AMPL) was until very recently a little-known altcoin, and then it blew up in the second half of July. It soon prompted a number of clone coins, including some anties.

This itself followed the explosion of yield farming, compound (COMP) and balancer (BAL) tokens.

The Cryptoverse immediately took notice of this latest development.

Stani Kulechov, founder of Aave, said that people are borrowing assets from Aave for YAM, calling it surreal. “I hope people are having sufficient collateral,” he said.

There are opinions by certain investors that YAM could flip AMPL in market capitalization in a week. Per CoinGecko.com, YAM’s current market capitalization is nearly USD 5 million, while AMPL’s is USD 227.9 million.

Eric Conner, a product researcher at blockchain startup Gnosis, noted that YAM is even pumping the above-mentioned COMP, LEND, Synthetix Network Token (SNX), and even maker (MKR), as “people FOMO [fear of missing out] buy for yield.”

Some, like crypto educator Brad Laurie, wonder if, despite the high risk, “when something is this fresh, this experimental & unaudited, it can drive people to lock up numerous DeFi startup tokens for profit (part of the appeal to related teams).”

Meanwhile, some other crypto insiders believe that this is just a bad idea:

Here are a few more reactions and complementary jokes:

__

__

__

__

__

https://www.twitter.com/DegenSpartan/status/1293412356609867776?ref_src=twsrc%5Etfw

More Articles

Price Analysis
Shiba Inu Burns Push SHIB Price Over $0.00003, Analysts Predict Another Zero Going Down by 2025
Harvey Hunter
Harvey Hunter
2024-12-01 17:13:41
Altcoin News
Former Facebook Exec Claims Political Barriers Led to Libra’s Collapse
Ruholamin Haqshanas
Ruholamin Haqshanas
2024-12-01 17:00:00
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors