Community proposes closing the Yam Finance DeFi project

A proposal has been submitted to the Yam Finance DeFi protocol’s ДАО for consideration to distribute treasury funds among users and to shut down the project.

A new treasury redemption proposal has been proposed on the forum.

Whether you agree with the proposal or not, it deserves discussion and thought. Please have a read and give your thoughts. https://t.co/CZYgoYTjyg

— Yam DAO (@YamFinance) October 8, 2022

The proposer, operating under the alias 1tx, believes there is still an opportunity “save some value” stored in the YAM token. The asset used to govern the project trades at around $0.18 (CoinGecko). Compared with the September peak of $41.40, prices have fallen 99.6%.

According to the website, the project is developing three main products:

• Umbrella — smart-contract insurance;
• Degnerative.Finance — synthetic assets;
• Yam DAO Set —  an investment fund for the DAO.

It is expected that all of this should generate income for the protocol. In 1tx’s view, the community has long ceased to see progress in creating and developing the proposed solutions. Meanwhile, the main development team receives more than $30,000 a month from the treasury, depleting it, the user noted.     

“After several years of developers’ efforts in various, sometimes conflicting directions, we believe that Yam has reached a critical point where it may continue on a downward trajectory (97.69% of value lost from the АТН), or allow token holders to redeem the assets they rightfully own”, wrote 1tx.

The total value of funds locked in the protocol stands at $198,735, according to DeFi Llama. In April 2021 the figure peaked at $6.76 million.

1tx proposed that the cost of buying back YAM from the treasury could be set at $0.207-$0.25. The mechanism envisages sending tokens to a dedicated burn smart contract — in response, users would receive a new replacement token in a 1:1 ratio. After the treasury is distributed according to YAM ownership, the remaining funds would be donated to charity.

“The right, though somber, choice is that Yam should be dissolved before further loss of value occurs”, concluded 1tx.

One of the project’s key developers under the alias feddas largely agreed with 1tx’s claims, but opposed closing the project. He said it is a tactical move by those who bought tokens at prices below the proposed buyback.

The developer assured that within 30 days he could make the treasury profitable, and within six months raise YAM’s price “much higher” than the $0.207-$0.25 range.

User opinions in the discussion were split. Some saw 1tx’s proposal as correct, because it is “better than doing nothing.” Others argued for giving the team another chance, claiming that “there is not much to lose at the moment.”

In August 2020, the first version of Yam protocol collapsed due to a bug that threatened governance. The YAM price collapsed by 99.2%. The amount of funds locked at its peak reached $600 million.

The current second iteration of the protocol in July 2022 faced a governance attack in which a third party attempted to gain control of the treasury. The developers repelled the attack.

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