Decentralized finance has become one of the hot financial markets in the year 2020. Before the day before yesterday, no one knew about the Yam Finance project.

On August 11th at 5pm UTC, the team behind the project’s development published an article explaining how to use the project they launched two hours ago via an article posted on their website. Average.

The project coin, Yam Finance, was generated with zero value and no audit, as specified in the post.

However, trackers and users of decentralized finance were not able to get enough YAM, as according to Etherscan, $90 million was deposited into the project within the first 90 minutes, while the price of YAM jumped to around 50 DAI.

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Less than 24 hours later, more than $400 million in Yam smart contracts had been deposited, and the value of the YAM coin had risen to nearly $95.

The sole purpose of these coins is to earn YAM rewards, which produce double-digit weekly returns.

In addition, a portion of these currencies are borrowed, which means that if the price goes in the wrong direction or a smart contract failure occurs, some of these traders will be at risk of losing their collateral.

According to Stanny Kilshoff, founder of the Aave project, $22 million was borrowed from LINK, $2.9 million from MKR and $4.2 million from SNX on Aave to grow YAM.

Yield cultivation and decentralized finance:

With hundreds of millions of dollars of cryptocurrency flowing into Yam Finance overnight, the total value booked from competing projects has plummeted in the so-called “yield farming” (yield farming is a recent term emerging in the decentralized finance arena meaning digital currency lending and access to Investment returns as a result of this, and the rates of return vary from one project to another.

Coins in Balancer, Curve, and Yearn are down 16%, 24% and 38%, respectively, according to DeFi Pulse.

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Yam Finance now has more assets locked in than any of the above-mentioned DeFi protocols, as it appears that yield-farming investors are spinning their cryptocurrencies into higher-yielding crops.

AMPL + YFI = YAM

The protocol, developed by Dan Elitzer and a few other DeFi investors and developers, aims to be an AMPL-based version.

The YAM project combines a flexible target supply of $1 (supply contracts when the token is less than $1, scaling when it is above $1) with the most successful features of DeFi.

Due to its flexible supply, YAM is not an ERC-20-based token and therefore it may be risky to use it as collateral in other pools or protocols.

YAM Distribution:

There will be two phases for a total initial supply of 5 million YAM tokens.

First, 2 million YAM tokens will be distributed to investors, as Yam Finance has enabled farming through eight different tokens and each pool will be rewarded with 250,000 YAM spread over 7 days.

Secondly, 3 million YAM tokens will be used for liquidity providers in the YAM/yCRV pool on Uniswap, which is used as a tool to bring back the supply base and to provide liquidity with the purchase of yCRV.

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Once the coins are distributed, YAM holders will control the entire protocol.

Possible Selling Pressure:

Return of the first supply base occurs one to two hours after the start of the second distribution wave.

The second wave of distribution began yesterday at 7 pm UTC.

Keep in mind that by following the AMPL system, the stock of YAM holders increases directly in their wallets, which means that there will suddenly be whales with more YAMs, which they got from farming and paid $0 for.

This can lead to potential selling pressure.

Since they did not pay anything for these coins, the level of sale is very low.

It can be said that it is ironic that the staggering returns that farmers hope to obtain are the driving force behind the craze for these governance coins.

In conclusion, it can be said that the YAM project, which has recently joined the decentralized finance arena, was able, in a short time, to replace the existing large project centers, and the rapid growth of the project reveals how the financial incentives are very effective in driving liquidity to the decentralized finance platforms.

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