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Interest in “Yam” Yield Farming is growing, but is it too risky?

August 12, 2020

The latest craze in the DeFi industry is a called the new yield protocol sweet potatowhat promises Use with “equal opportunities” without awards, without founder shares and with a zero value token at the start.

The experimental yam protocol is currently the topic on Crypto Twitter. Many are excited about the great potential benefits while others worry about the risks. The recently launched project offers an elastic supply token, similar to Ampleforth’s, that can expand and contract depending on market conditions.with the aim of achieving possible price stability and a link to the US dollar.

Yam will reallocate a ten percent portion of each expansion of the offering to purchase a high-yielding dollar-denominated stablecoin called yCRV, known as a “spill”. The tokens will be added to the treasury, which is controlled by the government of the Yam community.

Interest in “Yam” Yield Farming is growing, but is it too risky?Interest in “Yam” Yield Farming is growing, but is it too risky?

Like Yearn Finance when it launched its YFI native token, The official blog post states that the tokens are worthless at startup.

“We built Yam to be a minimally feasible monetary experiment At the start, a value of zero is displayed in the YAM token“.

Reasons to be careful

After the monumental achievements of AND FI, as The value was increased a thousand times and reached four-digit pricesSome in the crypto community are skeptical that similar tokens will take advantage of the hype. Erik Voorhees, CEO of Shapeshift, who admits he doesn’t understand how yam works, wondered if it was a pump-and-dump scam.

$ YAM looks like a scam … or to be more charitable, a clear and transparent operation of pointless pumping and dumping.

Projects like this won’t be good for …

What am i missing Are buyers ready to join a silly game or are people claiming real value?

– Erik Voorhees (@ErikVoorhees) August 12, 2020

Messari researcher Ryan Watkins repeated the feeling. “YAM = AMPL Ponzinomic + YFI Chad Launch + Tendies Math Memes”, wrote.

Without awards or token sales, YAM tokens are evenly distributed across eight staking pools according to the most important DeFi protocolsincluding COMP, MKR, LEND, YFI, LINK, ETH / AMPL, SNX and wBTC. Owners of any of these assets can stack on the Yam platform to earn YAM tokens in the first week.

distribution

With a total offer of 5 million tokens The first launch took place on August 11 at 19:00 UTC, when 2 million tokens were divided equally between the eight stake pools. Following this, another 3 million tokens were added to the YAM / yCRV Uniswap v2 liquidity pool, with 1.5 million being distributed in the first week. After that it went down by 50% every week, the blog post added.

“Attention, YAM Uniswap investors”

The only Uniswap pool that is YAM compatible is YAM / yCRV (Curve yPool-Token).

⚠️ Providing liquidity to other Uniswap funds is dangerous

📉You lose your sales quota

⚖️YAM owners can approve additional funding through government proposals.

– Yam Finance (@YamFinance) August 12, 2020

The stake to win is only possible for seven daysAfter this distribution has been completed, users can deposit their YAM tokens in Uniswap as liquidity in order to be able to participate in the ecosystem in the longer term.

The next week could be interesting for Yam Finance if it triggers the same madness as Yearn Finance does with its YFI token. But History suggests that sooner or later speculators of hyped new projects are likely to burn out, as many did during the 2017 ICO bubble.

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