A bug in YAM cryptocurrency code plummets its value from $167 to $14 in a matter of 35 minutes; YAM is currently trading at $0.80
This is one tragedy that could leave thousands of crypto lovers penniless. The new YAM cryptocurrency tokens were revealed by the developers just two days ago. The YAM tokens announcement caused excitement among traders because it was a decentralized finance (defi) project which used the yield farming protocol. The YAM tokens were intended to mirror the price of the U.S. dollar through loosening or contracting supply.
As YAM tokens began to trade yesterday, they peaked at $167 plummeted to just $14 in 35 minutes. This happened when the Yam Finance developers discovered a major flaw in the YAM token rebasing contract. At around 4 a.m. ET, cofounder Brock Elmore tweeted about the bug, and said he was sorry he “failed.”
We have found a bug in the rebasing contract, please read below.
All funds in staking contract are safe, as this is an unrelated part of the protocol.
User YAM balances are also unaffected.
— Yam Finance (@YamFinance) August 12, 2020
Why YAM tokens value crashed?
Around 6 PM UTC, on Wednesday, August 12, the YAM development team discovered a bug in the YAM rebasing contract that would mint far more YAM coins than it intended to sell. This resulted in a large amount of YAM being sent to the protocol reserve, explained the YAM project in a blog post.
“These tokens were owned by the governance contract itself, and therefore couldn’t vote. Because they exist and can’t vote, it’s impossible to ever meet the minimum voter participation. This means governance is permanently disabled, and all other tokens held by the governance contracts are permanently locked.”
The bug made the YAM process lose control of its on-chain governance feature as it caused the protocol to keep printing “dud” YAM tokens. This created a false supply of YAM tokens and cause the prices to fall drastically. A lot of people complained that the codebase wasn’t audited and that raised flags for certain individuals within the community.
A single line of code that caused all the mayhem
The mayhem that caused YAM to fall from an all-time high of $167 to the current $0.80 is this line of code:
totalSupply = initSupply.mul(yamsScalingFactor);
The developers say that it was supposed to read something like this:
totalSupply = initSupply.mul(yamsScalingFactor).div(BASE);
The fall from $14 to the current $.90 was precipitated after cofounder Brock Elmore tweet this:
i’m sorry everyone. i’ve failed. thank you for the insane support today. i’m sick with grief
— belmore🍠 (@brockjelmore) August 13, 2020
At present, the bug has locked up Curve tokens worth $750,000 stored in the project’s treasury. These tokens were supposed to serve as a reserve currency to support the value of YAM tokens. Before the bug was announced, there were nearly 29 million YAM tokens in circulation with a market cap of about $525 million. Now the market cap has disappeared while the price has dropped from $1.13 at the start of the day to the current $80.
The DeFi project was thought to be a good model and many came out in support of YAM developers.
You gave the community something unique to experiment with – thank you 🙏
— Anthony Sassano | sassal.eth 👨🌾 (@sassal0x) August 13, 2020
The developers have announced a plan to migrate to YAM 2.0. You can find all the details about it here.