What is YAM?
YAM is a decentralized cryptocurrency that features a unique governance model that allows its community to manage its treasury. The protocol is powered by YAM, the governance token that offers voting power to users and rewards them with revenue. With YAM, the community can build and improve the protocol through YAM governance.
Launched on August 12th, 2020, YAM Protocol is a groundbreaking initiative that incorporates some of the most exciting advancements in programmable money and governance. It was built by a team of DeFi experts and is now governed by the community.
Originally, YAM was an elastic supply cryptocurrency that expanded and contracted supply based on market conditions, with a target of 1 USDC per YAM. The stability mechanism of the protocol involved using a portion of each supply expansion to buy yUSD/ETH, which was then added to the Yam treasury, controlled via Yam community governance.
However, the Yam community has since voted to disable the rebasing/elastic supply function of Yam, with the scaling factor of Yam fixed at 2.50 since December 29th, 2020. YAM now operates as a DAO governance token and serves as a launch pad for DeFi projects supported by a community-governed treasury. Yam is currently developing various projects, such as Umbrella (Smart Contract Insurance), Degenerative.Finance (Synthetics), and Yam DAO Set (Set Protocol DAO Investment fund), which will generate revenue for the community. For more information on current projects, visit the Yam Discord.
YAM's launch was based on a fair distribution model inspired by YFI. Users could stake cryptocurrencies to receive a pro rata distribution of YAM each block. There was no premine, and neither the launch team nor VCs received any shares outside the prescribed rules of distribution to which all had access.
The distribution model had two goals: to ensure that Yam was genuinely a community-owned and governed protocol, and to align interests with the communities of the staked tokens, all of which had potential value and experience to add to the Yam protocol.
The rebasing mechanism of YAM had been disabled by community governance as of December 29th, 2020. Rebasing is a mechanism used to promote price stability by increasing supply when the price is above the target price and decreasing supply when the price is below the target. YAM is currently pegged to 1 USDC and uses the YAM/ETH Sushiswap pool to generate a TWAP (Time-Weighted Average Price) oracle to determine the necessary change in supply.
When a rebase occurs, the scalingFactor within the token changes, which automatically updates the balance of the tokens. In other words, all YAMs are always rebased. In the Yam protocol, when a positive rebase occurs, 5% of the YAM rebase amount is minted and sold for ETH via the YAM/ETH Sushiswap pool. The ETH is subsequently deposited into the governance-controlled treasury.
YAM launched with fully decentralized governance from day one, implementing the Compound governance module. This gives control of the protocol to YAM token holders, meaning that updates to the protocol and management of the treasury can only be performed with approval from YAM holders.
The governance process starts with discussions on the Yam Discord channel. Once an idea has been formalized, it is submitted to the Yam Governance Forum. If the community signals its interest and any necessary modifications are made, the proposal is then submitted to the Snapshot off-chain governance, where YAM token holders can vote using their token balances. If a proposal passes and no code is needed, the approved action can be taken. If code deployment is required, the code is audited if necessary, and then proposed via on-chain governance, at which point YAM token holders vote on-chain to deploy.
In conclusion, YAM is a community-owned and governed decentralized protocol that leverages the power of programmable money and governance. With its fair distribution method, YAM aligns interests with the communities of the staked tokens, ensuring that it remains truly community-owned and governed. Although the rebasing mechanism has been disabled, YAM continues to be a governance token with a community-governed treasury that serves as a launch pad for DeFi projects. The decentralized governance process implemented by YAM ensures that the protocol and treasury can only be updated or managed with the approval of YAM token holders, making YAM an exciting and innovative player in the world of DeFi.
The investment information, comments, and recommendations provided here do not fall under the scope of investment consulting. Therefore, making an investment decision based solely on the information and comments provided here may not yield results that meet your expectations.
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