Yam DeFi protocol token with $600m in assets plunges 99% in 24 hours

The Yam token of the experimental DeFi protocol collapsed 99% in 24 hours. The cause was a vulnerability discovered in the protocol’s governance system.

On Wednesday, August 12, the market value of YAM rose above $167. After that, within a few hours the price fell to $87, and by the end of the day — below $13. At the time of writing, the price of YAM had plunged 99.2% to $0.76.

The plunge occurred against the backdrop of a discovered bug, leading to an excessive issuance of tokens that were then sent to the address of the YAM Reserves contract. This threatened the ability of token holders to continue governing the protocol.

Developers noted that urgent steps were required to salvage the protocol before the second redenomination of YAM. Through two votes, token holders approved the proposed temporary changes aimed at addressing the bug.

On Thursday, August 13, the Yam Finance developer Brock Elmor announced that he had failed to fix the vulnerability.

i’m sorry everyone. i’ve failed. thank you for the insane support today. i’m sick with grief

— belmore🍠 (@brockjelmore) August 13, 2020

“I apologise to everyone. I have failed. Thank you for your incredible support today,” he wrote.

As a result, following the failed update attempt, YAM token holders completely lost control over the protocol.

DeFi protocol Yam was launched in the night of August 12. An hour after it began, the volume of locked assets in the project’s liquidity pools reached $76 million. The developers had initially warned users that the protocol had not undergone a security audit. Nevertheless, the volume of locked assets in Yam at its peak exceeded $600 million.

Update: the project’s developers announced their intention to launch version 2.0 of the protocol.

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