What happens when you mix esoteric financial instruments with bad coding practices? You get Decentralized Finance (DeFi), a new buzzword popular with crypto fans who see it as a way to invest in new startups or make money work by lending dormant crypto to impatient customers. .
The latest DeFi hilarity comes to us in the form of the YAM token, a cryptocurrency originally designed to do nothing and be completely worthless.
What this means in practice is quite funny. The YAM, aannounced in a medium article by founder Brock Elmore, was supposed to be a “minimally viable monetary experiment”, taking up the concept of the minimum viable product in the startup world. MVP is a product that works – but barely … and is used to test product-to-market fit. In this case, however, there was no product-market adjustment.
“After deployment, it is completely dependent on the holders of YAM to determine its value and future development,” he said. This means that Elmore was waiting for YAM owners — or investors — to come up with projects to be funded through the platform.
Elmore posted the first mention of YAM on Medium on August 11. The token went on sale, and savvy crypto investors spiked the price to nearly $ 180 on August 12, giving the project an instant market cap of $ 460 million.
Hours after its top story, project managers posted a terrible warning: “SAVE YAM! 🍠“They said the developers accidentally injected a bug into the system that ‘hit’ too many starchy cryptocurrencies, resulting in a glut that would not allow anyone – neither the creators nor the YAM ‘investors’ – to control the platform. form. They wrote:
If the governance is unable to submit a bug fix proposal before the second rebase, no further governance action will be possible because so many YAMs will be held in the reserve that it will be impossible for the proposals to achieve quorum. If this happens, YAM’s treasury will become ungovernable and those funds will be lost.
On August 13, the entire market cap fell to near zero, the single exchange that supported these YAMs stopped selling them. The exchange, Gate.io, has since reinstated the YAM but that doesn’t look good for the YAMsters.
YAM is currently trading at around $ 1 and many users are trying to drop their bags of YAM on the open market. For his part, Elmore followed the advice of Kenny Rogers and decided to fold.
The cryptocurrency world responded with amusement.
“What a really crazy race. Absolute glory and everyone gets rich to train the wreckage in less than 48 hours. It was a crazy experience and it shows the importance of competent coders, ”wrote one Reddit user. Others saw the greed in the fall of YAM.
“He got very quick from Defi nerd FOMO and then died when they found a bug in the complex unaudited smart contract that couldn’t be fixed,” said Adam Levine, host of LetsTalkBitcoin. He compares the excitement to 2017 when crypto projects kicked off (and failed) almost as fast as this noble tuber.