Rebase Bug Permanently Breaks Yam Governance

Listen to article A bug in the hastily-developed contracts for Yam Finance resulted in the governance contracts being "Permanently broken" and $750,000 worth of Curve tokens being locked from use.

Re Cronje, DeFi developer and founder of the yEarn protocol, told Cointelegraph that this resulted from a bugged rebase function.

Yam is supposed to be a stablecoin with a similar mechanism to Ampleforth, with the contracts creating or destroying supply based on the token's price to maintain a $1 peg.

The issue was compounded by an additional mechanism used by Yam to balance the token's price.

The proceeds from the sale and remaining YAM are sent into the project's treasury contract.

A further aspect of the system is its governance, which requires a percentage of all tokens to be committed to a proposal for 12.5 hours.

While there were earlier concerns about not enough tokens being delegated, triggering a support campaign to get holders to vote, this was ultimately futile.

Since the rebase created a huge amount of new YAM and sent it to the treasury contract, it now holds the vast majority of all tokens.

The result is that both the governance and the treasury are now "Bricked" and cannot be accessed.

The rebase bug cannot be fixed without access to governance, so this should in theory spell the death of the project - or at least its existing smart contracts and tokens.