HAM: A New Baconning

Why HAM?

Participation in our community is a MUST for progress to be made. Every decision and modification from the base workings of YAM will be heavily discussed with strong transparency. We will be using the EIP process (renamed into HIPs) to formalize changes, power discussions, and reach consensus among every participant. We can truly get a fair launch and a correct start for HAM.

Where YAM could be improved

While YAM launched as an experiment, we believe there were several flaws with its inception and design.

  • First off, we believe the tokenized farming was flawed in that all the pools were equally weighted. Some were very heavily diluted (WETH) and unattractive while others were too rewarding and encouraged purchasing the staked asset or gave existing holders an unfair advantage (COMP). Some of the tokens also had poor distribution (COMP) or were difficult or risky to obtain (AMPL_ETH_UNI_LP). The plans for the distribution are still very much in the air, so we welcome additional discussion!
  • Second, YAM’s farming schedule and liquidity mining design nearly incentivized chaos. Many early members who had received plentiful YAMs from farming had free capital to enter into the YAM/yCRV liquidity mining pool, while new members saw the attractive returns, and bought YAM with existing capital in order to capitalize on the yields as quickly as possible. Due to the protocol’s sudden downfall, and the bug being especially harmful towards the YAM/yCRV pool, liquidity providers witnessed intense impermanent loss if they were caught in the pool during the second rebase.
  • Lastly (but always more to discuss), the governance mechanism was an odd choice considering that it required exiting all existing positions and farming opportunities for several days in order to properly participate. For a token that is built up by farmers, this is a rather ill-designed governance model. Exercising the rights of voters shouldn’t have any opportunity cost, or else governance becomes inefficient and unreliable.

A Call to the Community

One of the key foundational aspects for HAM is its community. YAM’s largest failure was the lack of transparency into the key decisions that formed the protocol. While a DAO is great conceptually for decentralization, they tend to struggle when every aspect is decided by a closed group of people. HAM aims to solve this by being a completely open and transparent process from the start.
YAM was built for its community. We are taking it further and are letting HAM be built BY the community FOR the community. By analyzing YAMs launch it becomes apparent that fair launches, rigid code, transparent development, and risk mitigating pool structures are imperative in DeFi projects moving forward.

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