Ethereum‘s Yam protocol attracted more than $400 million from investors with the first 24 hours of its launch. Yam is an experimental and unaudited decentralized finance (DeFi) protocol based on the Ethereum blockchain.
However, the project being unaudited did not stop investors from pouring money into the project. Reportedly, one investor sent $11 million worth of WETH to YAM in a single transaction.
Yesterday, developers released the Yam protocol, a DeFi yield farming protocol with native token YAM. The protocol works on Uniswap, where traders have rewarded YAM tokens for providing liquidity. Traders just need to place a token pair such as ETH/COMP in a pool and will be rewarded YAM tokens in return.
Yield farming has caused the price of many DeFi assets to rise along with YAM. These include Compound (COMP), Maker (MKR), and Ampleforth (AMPL) that saw a rise of 54, 29, and 41 percent, respectively.
Meanwhile, there are more than $400 million locked in the yam protocol. This means that the protocol has locked more assets than in Balancer, Curve, and Yearn.
How does it work?
The Yam protocol works similarly to Ampleforth. The asset’s price will increase as more investors pour funds into it. However, a “rebase” that is set to occur at set intervals will push the price back towards one dollar by minting new YAM tokens. Investors are rushing to generate revenue through the price increase before the rebase occurs.
The project saw investors pouring funds at a rapid speed and hence told the users to “exercise some cautions.” The team took it to Twitter to emphasize that the protocol has not been audited by any professional auditor and is an experiment.
The Medium article stated that the protocol was a 10-day project from start to launch.