Yam Finance
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Yam Finance

Yam Quarterly Treasury Report — Q4 2021

Preface: Cryptocurrency is very volatile. All numbers reported in this report is a snapshot of value on 01/12/2022. All assets will move up and down in value, and expenses and income are determined in US Dollar equivalent at the time of the snapshot. For this report, that snapshot occurred on January

I’m happy to share the quarterly update for the Yam Treasury that reviews DAO income, expenses, assets, and team contributor changes.

While the YAM token price has fallen from Q3 and is down from it’s highs of around 5 dollars last spring, the YAM treasury remains healthy. The treasury, and it’s ability to pay contributors and invest in new projects is key to the continued growth of the YamDAO. While the DAO has had some fits and starts with our products, the core contributors are focused on continuing to experiment and develop our existing and new products, and also solidify the role and aspirations for the DAO within the web3 space. The focus of many contributors has shifted to developing and improving the basic structure of the DAO to make sure that we are building on a solid foundation of decentralization, accountability, and openness.

Total Revenue: $119,914.93

Operational Revenue

The DAO earned the following revenues from the products that it has developed.

  1. YamDAO generated operating revenues of $15,705.77 worth of UMA from our Yam Synths product.
  2. YamDAO earned $3928.44 worth of Sushi Tokens from it’s YAM/ETH SLP incentivizer.

A total of $19,634..22 was earned in Operational Revenue in Q4, 2021.

Investment Revenue

The DAO uses its treasury to invest in different products and services that help grow the DAO and bootstrap its products.

  1. YamDAO earned $100,280.71 worth of UMA tokens from minting and providing liquidity for our Yam Synths products, including uGAS and uPUNKS.
  2. YamDAO also earned interest from sushi and it’s stablecoins deposited in Yearn Vaults, but those are accounted for in general treasury growth due to how they rebalance internally.

A total of $100,280.71 was earned in Investment Revenue in Q4, 2021.


Both the Yam Synths product and the Sushiswap ETH/YAM LP incentivizer continue to earn revenues for the DAO. The sushi rewards rate has dropped to ~1% APR and there is minimal chance that this will go up in the future. While this is still essentially free money for the DAO, the low rate opens up the opportunity for us to explore other options for our token liquidity in the future.

Yam Synths provided good investment returns for the DAO (~30% on ~$1.4M in ETH), even though the revenue generated directly by the product side is still lackluster. A new iteration of Yam Synths is in production and I am optimistic that it will provide a better product, increased returns, and more revenue for the DAO when it is released.

IndexCoop stopped paying our rewards for DPI/ETH LPs so that is no longer a source of investment revenue for the DAO. We still have a portion of the treasury LPing, which does earn trading fees, but those are counted in general treasury growth due to how they rebalance internally.

Total Expenses: $235,362.69

In the quarterly report, expenses are broken down both by contributor compensation and general expenses, and by USD and YAM expenses. Contributor compensation is paid to individuals who have worked on different aspects of the YAM DAO, typically in a combination of USDC and YAM. General expenses are the costs required to run the DAO and include gas costs for transactions, hosting and infrastructure costs, and other day to day expenses. These are paid in YAM where possible, but are also sometimes paid in USD or ETH.

USD/ETH Expenses

A total of $136,523.74 was spent from the treasury on Q4 expenses, including contributor compensation and general expenses. Only a very small portion of this was paid in ETH (~$2000)

YAM Expenses

A total of $98,838.95 worth of YAM was spent from the treasury on Q4 expenses, including contributor compensation and general expenses. The dollar value is determined by looking at the TWAP price at the Q4 snapshot date, which yields $0.35.

Delta of Income vs. Expenses (excluding YAM): -$16,608.81

Delta of Income vs. Expenses (including YAM): -$115,447.77


Most of YAM’s expenses come from paying contributors to the DAO. This money spent has a high upside as just 1 successful product can lead to significant revenue growth and potential token price appreciation. Given that compensation costs are the DAO’s main costs, we are continuing to look to ways to make contributor compensation more efficient and transparent, while streamlining the work that needs to be done. YIP-100 is a first step for this and I expect to see multiple new proposals in the new year focused on tackling the organizational structure of YAM.

Overall, the DAO had a slight revenue shortfall when costs in YAM are ignored (-$16,608.81). This is an insignificant percentage of the treasury, but we should watch this number in the next few quarters. The runway that the DAO has available using it’s treasury should extend multiple years, even in a bear market. The Treasury YAM reserves are something we need to keep an eye on though. Because of the drop in token price, The DAO ends up paying contributors a larger quantity of YAM, which more quickly depletes the contributor vesting pool. We only have about half a year of runway available in YAM tokens to pay contributors and we will need to come up with solutions if the token price does not increase before then.

Total Q4 Non-YAM Treasury Asset Value: $6,685,713.54

Change in Value from Previous Quarter: -$828,401.24 (11% decrease)

Non-Yam Assets are used to pay contributors to develop products for the DAO and for investment purposes to support the Yam ecosystem and projects.

The treasury has not been re-balanced since Q3 of 2021 and the process to do this will begin in Q1 of 2022. There is a framework to manage re-balancing and it will be undertaken upon the recommendation of the core contributors and advisors, with the approval of YAM voters.

Total Q4 YAM and General Expense Fund Asset Value: $422,031.47

Change in Value from Previous Quarter: -$245,348.93 (37% decrease)

YAM is primarily used for contributor compensation, general expenses, and incentives. The General Expense Fund is used for general expenses and contributor compensation during trial periods.


The treasury remains diversified between ETH, USD, and DeFi Tokens. We maintain general DeFi exposure through the DPI index, and then hold individual positions in UMA, Sushi, Index, and GTC (airdropped). YIP-80 provides the framework for how much of each the treasury holds and is based on tailored risk parameters. We performed a rebalance in Q3. The Treasury has shrunk in USD value over the last quarter, mainly due to market fluctuations. These market fluctuations are beyond our control, but we can rebalance the treasury to manage our risk.

The DAO treasury is the primary asset that the DAO owns. I have recently written about how this asset can be used to benefit active participants of the DAO beyond just those who actively work for it. The goal is for all YAM holders to be able to realize some of the value that the Treasury can create and do it in a sustainable way that prioritized the long term growth of the DAO and encourages healthy participation. Please join in the discussion if you feel strongly about any of these topics!

Other Funds and Incentives

The DAO’s only current incentive program is to incentivize liquidity in the ETH/YAM Sushiswap pair. It currently pays out 12,500 YAM per week. About 700,000 of the total 1.5M YAM allocated toward this pool have been used and it is set to run for another ~64 weeks (~1.25 years). There has been little discussion about YAM issuance or incentives for our products, but it is something that the community should be considering. We have to think about the future of our liquidity pools and how we plan to maintain them as a semi-public good to all YAM holders. The rise of protocol owned liquidity has been a big part of the narrative around DeFi 2.0. I have written about how the DAO could transition to a model where it owns its own liquidity here.

For a deeper dive, see this link to the Yam Quarterly Financial Summary Google Doc.

Closing Thoughts

I view the DAO as a living organization that needs to continue to evolve and grow in order to reach its potential. This involves continually working to improve our internal processes and workflows, as well as developing new ways in which we can incentivize outside contributions, participation, and collaborations. Together, we are defining new ways to work, create value, and organize in the Web3 space and beyond.

Be sure to follow YAM on Medium or Twitter for news. Also, please join the discord and participate!




YAM is an experiment in decentralized governance and elastic cryptocurrency

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Ross Galloway

Ross Galloway

Just some Guy. Twitter = @galloway_the

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