Yield farming protocol tanks and takes YFI, COMP, LEND down with it

The DeFi market took a huge hit earlier today when YAM, an experimental yield farming project, suffered a contract bug that caused its market cap to drop from $60 million to virtually zero.

The DeFi space was shaken to the core today when YAM, a two-day-old project offering an insane 10,000 percent APY, crashed.

The price retracement from $100 level to $10 level as part of the 10x rebase and had no net effect in the value held by YAM holders.

Launched on Tuesday, the ambitious yield farming protocol was created with an elastic supply of tokens, which was to loosen or contract in order to keep YAM's parity with the U.S. dollar.

Soon after YAM's launch, a bug in one of the protocol's smart contracts was discovered that led to the overproduction of YAM tokens.

Brock Elmore, one of the developers of YAM, pronounced the protocol dead earlier today in a tweet.

The failure of YAM was felt throughout the entire DeFi space-traders reported exorbitant Ethereum fees when withdrawing their funds, and several significant coins saw massive dents in their price following the mass liquidations of YAM. Farming YAM required users to stake any 1 token from the basket of available tokens.

When the farming started, these tokens witnessed a surge in the prices because yield farmers were acquiring these tokens to stake them in the YAM contract to earn high yields.

When the price of YAM crashed, yield farmers decided to capitulate their operations of farming and unstaked their DeFi tokens and later sold them back to the markets.

Rapidly growing lending protocol Compound saw its price drop by almost 20 percent right at the time when YAM began to drop.