Decentralized finance (DeFi) protocol Yam Finance is relaunching on September 18.
Yam Finance V2, a fork of Compound (COMP) featuring a native token with an elastic supply, burst onto the DeFi scene last month — garnering more than half a billion in assets from yield farmers within 24 hours of launching.
However, the unaudited V2 of Yam Finance came to a dramatic conclusion when a catastrophic bug caused excessive reserves to be minted which rendered it impossible for governance to be executed.
The relaunch follows a period of interim governance during which community consensus was found regarding “all key issues for V3’s launch”, with the community voting to change Yam’s reserve asset to yUSD, extend the voting period to two days, and adjust the thresholds for proposals and quorum.
Most importantly for the confidence of potential investors, an audit was completed by blockchain security firm PeckShield.
The audit found “several issues related to either security or performance” that could be further improved in Yam’s smart contracts — including 17 “basic coding bugs,” 12 issues found during PeckShield’s “advanced DeFi scrutiny” of “business logics” and “system operations,” and six additional recommendations.
PeckShield describes four of the issues as “informational,” while six were considered to be low-risk, four were medium-risk, and one was classified as high-risk. No issues were found to be of “critical” severity, and all identified issues have since been “promptly confirmed and fixed.” PeckShield concluded:
“YAM presents an interesting and novel experiment of on-chain community-based governance and elastic supply cryptocurrency, and we are very impressed by the overall design and implementation.”
However, the firm emphasized that “smart contracts as a whole are still in an early, but exciting stage of development,” echoing the cautionary warnings of Ethereum (ETH) co-creator Vitalik Buterin regarding “smart contract risk.”
The audit was paid for using funds from the project’s Gitcoin grant, with all remaining funds set to be used to sponsor a bug bounty.
Liquidity incentives will go live for the YAM/yUSD pairing on September 19, with the first rebase set to occur two days later. Yam V2 tokens are to be manually migrated to V3 at a 1:1 ratio, with 50% immediately redeemable and the remaining half to be continuously vested over 30 days.