The DeFi project Yam Finance was among the first to take advantage of users’ interest in obtaining tokens by providing liquidity, but was forced to temporarily close because of a bug found in its unaudited smart contract.
A clone token
Many experts have warned that most DeFi protocols are unreliable. Downloading an application with a digital wallet, buying Ethereum, staking Ethereum and obtaining native protocol tokens (DeFi tokens) or selling Ethereum and buying such tokens, further farming such tokens, and making “profit” – all these operations are accompanied by risks that can be associated with a number of issues.
Experts began to assume that the organizer have access to the liquidity in Ethereum in a particular DeFi project, and they, thereby, can withdraw the funds of participants to another wallet.
In another case, technical difficulties arise during the calculation of the “income” and the conditions for its “withdrawal”.
The declared volumes of turnover of digital assets, and their estimated “profitability”, are often stated without any confirmation. There is almost never an independent audit that would show that we are not talking about wash trading, that is, about fictitious trading, with the transfer of assets from one account to another to show “large volumes”.
In addition, DeFi is designed so that technicians can create “clone tokens”, which means that investors can confuse which asset they are investing in. This, for example, happened with Yam Finance, which became a clone of YFI tokens.
Return of Yam
The coin returned as Yam v2, designed to preserve assets while the developers performed all work for a full restart of a project. In a month they plan to announce the upcoming release of Yam v3. This time the contract was audited by the auditing firm PeckShield.
As it was stated, the asset migration will take place on Friday, September 18th. Tokens will be transferred at a rate of 1 to 1. The new protocol will initially support one YAM / yUSD liquidity pool with a total reward volume of 925,000YAM. The distribution of 92,500YAM from this amount will take place in September, then rewards will decline by 10% each week.
A migration process will also be organized for users who failed to transfer assets to the second version of the protocol in time. Offer does not apply to YAM v1 holders who purchased their tokens after the migration window was closed.
Amid this announcement, the YAM rate rose 40% from $24 to $33 in 3 hours, but then correction followed.