There’s a new yield farming protocol in town and it’s taking some of the best practices in DeFi and governance today.
YAM: An Experiment in Fair Farming, Governance, and Elasticity https://t.co/cyzvHZ2Blx
— Yam Finance (@YamFinance) August 11, 2020
YAM is an elastic supply crypto asset, similar to Ampleforth (AMPL), where the supply expands and contracts in response to market conditions with the aim of targeting a 1 USD peg per YAM. One of the interesting differentiators about YAM’s approach is that 10% of each supply expansion (known as a rebase) is used to buy yCRV, a high-yielding basket of USD stablecoins, and is allocated to the Yam treasury which is controlled via community governance.
Moreover, YAM is taking a page from the YFI playbook and distributing tokens with no premine, no founders shares, and no VC interests. This is simply an equal-opportunity staking distribution for anyone in the world to participate.
How do I earn YAMs?
With no premine and no sale, YAM tokens are distributed evenly across eight YAM staking pools including:
- COMP
- LEND
- LINK
- MKR
- SNX
- WETH
- YFI
- ETH/AMPL Uniswap LP tokens
Holders of any of the above tokens can stake those tokens into Yam’s front-end and start earning YAM. Following the launch of the initial distribution, there will be an incentivized YAM/yCRV Uniswap pool where users can earn bonus tokens for providing liquidity into the popular DeFi AMMs.
Token Supply & Distribution Schedule
There’s a total supply of 5,000,000 YAM.
Given the nature of the token, this figure and all future YAM supply figures are subject to change by future rebases. The rebase period is set to occur once every 12 hours with the initial rebase set to occur roughly 12 hours after the Wave 2 distribution (YAM Uniswap liquidity).
YAM will initially distribute 2,000,000 YAM (250,000 per pool) per week to users who stake any of the aforementioned DeFi tokens. Following the initial distribution, Wave 2 Uniswap liquidity provisionings will be incentivized with 3,000,000 YAM with 1.5M distributed in the first week and decreasing by 50% each week after.
With the above distribution schedule in mind, it’s important to recognize that earning YAM via staking popular DeFi tokens will only be available for the next 7 days. Following the completion of this distribution, users will be able to deposit their YAMs into Uniswap to provide liquidity for a more long-term incentive to participate in the ecosystem.
Governance
One of the core properties with YAM is the role of governance and the right to determine and update functionality of the Yam protocol. This could include oracle usage, rebase functionality, inflation, incentive design, the Yam treasury and more.
And as mentioned above, with 10% of all rebases being used to purchase yCRV, YAM holders retain the right to vote on how that capital is allocated to the ecosystem. This could be in any way imaginable including mechanisms that add robustness or security to the protocol or even economic rights over the protocol’s cash flows.
While nothing is explicitly stated, what is stated is that YAM holds zero inherent value (similar to YFI), and any value which may accrue to the token is entirely decided by the community and its token holders.
In Closing
Given that the Yam Protocol is taking a community-organic approach rather than raising capital via VCs and allocating large portions to the founders, team, and/or the protocol’s foundation, YAM offers an interesting new stability protocol to rival Ampleforth.
We can imagine that the next week or two will be a crazy time as yield farmers look to capitalize on this high-risk, high-reward opportunity. We can also imagine that the memes from the Yam community will be equally as entertaining.
For more information on Yam Protocol, make sure to read the official blog post. For those interested in farming some YAMs, you can do so via yam.finance.
Lastly, to stay up to date on Yam, you can see updates via Twitter.
Shoutout to Brock Elmore, Trent Elmore, Clinton Bembry, Dan Elitzer, and Will Price for pioneering this exciting, meme-driven DeFi protocol!
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.
