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Binance CEO Says Many DeFi Projects Will See YAM's Fate

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Mon, 08/24/2020 - 15:56
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Alex Dovbnya
Binance CEO Changpeng Zhao voices his reservations about the DeFi craze
Binance CEO Says Many DeFi Projects Will See YAM's Fate
Cover image via www.forbes.com
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In an Aug. 24 tweet, Binance CEO Changpeng Zhao offered a bleak outlook on the ongoing decentralized finance craze, claiming that "many DeFi projects" will see the fate of Yam Finance.

He encourages investors to carefully research each project instead of following the herd:

Don't "follow the herd". You need to RESEARCH then choose. Be responsible for your own actions.

The death (and resuscitation) of Yam Finance

Yam Finance was the latest monetary experiment in the yield farming niche. The protocol launched its valueless YAM token with an elastic supply.

ShapeShift CEO Erik Voorhees directly slammed the project as "a scam" upon its launch, channeling plenty of other crypto luminaries.

YAM looks like a scam... or to be more charitable, fairly transparent pump and dump nonsense. Projects like this are not going to be good for defi… What am I missing? Are the buyers willing participants in a silly game, or are people alleging actual value?

This, however, did not stop speculators from propelling the token's market cap to $191 mln.

Everyone's worst fears about Yam Finance turned out to be true in just one day: YAM went under due to a rebase bug, tanking to virtually zero.

YAM
Image by @cz_binance

Now, Yam Finance is attempting a retest by migrating tokens to YAMv2, a new contract, before rolling out fully-audited YAMv3.

Related
Tron Goes All In on DeFi as Justin Sun Plans JUSTSwap to Challenge Ethereum-Based DeFi in Future

Cautious optimism

Notably, Ethereum co-founder Vitalik Buterin himself questioned the viability of the biggest players within the DeFi ecosystem, such as lending protocol Compound:

It’s hard for something like Compound to claim that it has a 98 percent chance of surviving a year when the thing has been running for a year.

Galaxy Digital CEO Mike Novogratz also urged market participants to tread carefully in his latest Bloomberg interview.

Despite this warning, the DeFi space is getting hotter with each passing day. On Aug. 24, Binance itself announced its first DeFi-oriented hackathon that will take place in India.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.