DeFi's Latest: Nearly Half A Billion In Yams In 24 Hours

Plus big money gains for Grayscale's Bitcoin Trust

Happy Humpday, Blockfolians

The Lede

It seems that every week there is some new term, new protocol, new opportunity in decentralized finance.

Sweet Potatoes & Yams | SNAP-Ed

This week, that opportunity is this: 🍠

That’s right. The hot new crazy is Yam farming.

Insanely, in just about one day Yam has attracted nearly half a bullion dollars in interest.

Anthony Sassano describes what makes it - and so many other experiments like it - so interesting.

What is unique about YAM (and YFI) is that they feel like massively multiplayer online (MMO) games in that there is a global community all coordinating around different goals in the same shared world (Ethereum). Instead of a dragon, the raid boss of yield farming is figuring out how to optimize your returns. The legendary items are finding “alpha” that no one else knows about. And, of course, instead of stacking in-game currencies like gold, people are stacking stablecoins, tokens, or gwei. I think it’s only a matter of time before someone slaps a game-like interface on these protocols to really take farming to the next level.

Now, is this whole thing sustainable? Of course not. Just like with YFI farming, the rewards will become a lot less lucrative over time and the thousand percent APY that you see today will be gone as quickly as it came. The APY also relies on the price of YAM which has an in-built rebase mechanism that is going to cause wild volatility (first one happens in a few hours). But the point here is not sustainability of these crazy APYs - its to experiment with wildly new distribution mechanisms for these governance tokens. Like YFI, YAM has no pre-mine, no team allocation, no VC or investor allocation and was launched fairly for everyone to farm at the same time.

Gotta say…this feels like the beginning of one of the most interesting times the crypto industry has ever seen.

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Highly Relevant Reading


Community Commentary

Amazing contextualization of this moment (particularly with regard to Yam farming)
What makes the DeFi boom different

A Really Big Number We Should Be Paying Attention To  

$1.6B

That’s the amount that Grayscale says its BTC trust has risen over the last six months


Final Thought

Check out the comments…