At approximately 6PM UTC, on Wed August 12, we discovered a bug in the YAM rebasing contract that would mint far more YAM than intended to sell to the Uniswap YAM/yCRV pool, sending a large amount of excess YAM to the protocol reserve. Given YAM’s governance module, this bug would render it impossible to reach quorum, meaning no governance action would be possible and funds in the treasury would be locked.
We believed achieving quorum for a bug-fix proposal would allow us to save the protocol, and we quickly rallied the community to delegate their votes towards this end.
Shortly after 7am UTC on Thurs August 13th, we submitted a governance proposal and cast a vote with what we originally believed were sufficient votes to be able to enact it. Shortly thereafter, with help from security experts, we concluded that the rebaser bug would interact with the governance module and prevent this proposal from succeeding.
What this community managed to achieve over the past 36 hours was nothing short of incredible. When we deployed the contracts about 48 hours ago, we never could have imagined the massive coordination game that would unfold.
The Current State of YAM
YAM will live on as long as Ethereum continues to operate with support for the contract as written. It can no longer be modified by governance, so on a technical level, it will behave in a similar fashion to other rebasing assets such as AMPL.
The YAM / yCRV Uniswap V2 pool will remain unsafe in perpetuity. Though the YAM community managed to get 75% of liquidity out of the pool before the second rebase, any residual liquidity should be removed ASAP.
The distribution mechanism and events of the past 36 hours have brought together an immensely special community around YAM. We believe this community deserves the chance to persist.
We will be setting up a Gitcoin grant to coordinate a community-funded audit of the YAM contracts. If the funding goal is reached, upon the completion of the audit, we plan to support the launch of YAM 2.0 via migration contract from YAM.
Again, we want to thank all who participated in the wild early days of the YAM experiment, especially those who rallied to support us.