Trent Elmore: YAM Finance 🍠 – The Rise, Fall, and Rise Again of the OG Foodcoin #375

Transcript

this is epicenter episode 375 with guest trent elmore [Music] hi i'm sebastian cuccio and you're listening to epicenter the podcast where we interview crypto founders builders and thought leaders on this show we dive deep to learn how things work at a technical level and we fly high to understand visionary concepts and long-term trends if you like epicenter the best way to support us is to leave a review in apple podcast and if you're on a mac or ios device the easiest way to do that is to go to epicenter dot rocks apple and if you're new to the podcast

be sure to subscribe on apple podcast spotify or wherever you listen today our guest is trent elmore he is one of the founders of the yam project it took off last summer and it sparked a massive movement and cultural phenomenon in the crypto world i'm talking of course about food tokens so as trent explains it yam was created as an experiment and it brought together some of the most far-out and innovative ideas in d5 it borrows from existing concepts so the fair launch mechanism in wi-fi and the rebase mechanism in ample forth stick them together and you get yams trent shares the details about the early days of the project how it came together he talks about the rebase mechanism and how that works he discusses the yam

treasury and what those funds are being used for today talks about the governance protocol and takes us through the hours and days which followed the bug discovery which of course bricked the protocol and led to the launch of the v2 contract and finally shares his learnings from this entire experiment which are really fascinating now you might be wondering why we chose to do this episode almost six months after the whole food token frenzy started well in true epicenter fashion i think having these conversations later affords us the advantage of hindsight and we're able to learn more about the lessons learned from these experiments and that was certainly the case here so if you're holding yams

you may have noticed that the price has gone up these last couple weeks and maybe you want to swap them for some eath or die or something else well if you're going to do that you should go to one inch it's my go to dex aggregator and i know that when i use one inch i'm getting the best price across dexes and amms and a couple weeks ago they did an airdrop and so if you've been using one inch these last couple months maybe you've got some uh some one-inch tokens there waiting for you and i discovered i had some and it was a nice little chunk of change so to swap your yams or discover if you have some one-inch tokens waiting for you go to epicenter.rockslash one inch and with that here's our conversation with trent elmore we're here today with trent elmore he is

one of the launchers of yam finance uh one of the you know hottest projects of the 2020 and like really you know i have to say like one of the pivotal like moments in the like defy evolution over the course of the last couple of months um and so you know we're excited to have trent on to help talk with us about like yams and like you know especially a lot of the craziness that happened when it first launched but then also about like you know what's the future of the project and where it's going today because it you know it is not a dead project as many may think and so we're trying to see what what's the plans here and so uh trent nice to have you on before we get started can you well yeah

can you just tell us a little bit about your background how did you get involved with crypto and d5 and i know you have another project called toppo finance and uh can you tell us all about it yeah hi guys uh thanks for having me on so i guess my uh journey in crypto and d5 well crypto started you know i'm part of the the 2017 cohort that kind of rode that initial first wave and then just totally got got hooked on it my background is originally in art history in school and then advertising after school so i just really love kind of like i've always loved the multi-disciplinary nature of

um kind of those uh disciplines particularly this intersection of like art and culture visual culture and then commerce and economics um and so that obviously plays really well into the to the crypto space so i really started uh working in d5 with my brother brock in the beginning of 2019 really when kind of d5 first started to emerge as a real thing when you had compound and dydx showing um you know 20 40 interest rates um and kind of that initial infrastructure starting to get built out so our first project in the space was called topo finance which originally was a yield bouncer that optimized your your interest rates

across um dydx compound and fulcrum and so essentially we got that to a beta stage towards the end of 2019 and then as yields were starting to compress and we didn't exactly foresee the the yield farming craze that would happen uh three to four months later we started to leverage our kind of inter-protocol transaction capabilities and expertise to start to go into liquidation and arbitrage strategies so we started to play a more trading trading prop shop type role in the the ecosystem and so we were doing that full-time until uh you know we along with uh will dan and clinton came upon the

great yam side quest um that was originally meant to be just a fun side project that we put together in two weeks it is now of course the main quest and what we're both working on full-time so that's that's a brief background on me as you just said um there's uh five people who actually launched yam finance at the time so it was you and your brother brock and then uh clinton bamberry then eliza and will price how did you guys meet um did you come together to launch this specifically or is it something that kind of was created you know goofing around together um yeah so will dan brock and i have you know been in contact with each other

for you know the last couple years at various um you know skype calls and telegram channels and you know conferences and all of all of that stuff um and dan was familiar with clinton and kind of brought him in but yeah i mean the the original assembly of the the launchers was really just kind of us kicking around ideas and um really kind of in the wake of apple's recent uh decline in market cap and kind of what what's known as the death spiral um and so we were just you know chatting about those dynamics and how one might prevent that death spiral and the idea was brought up of

instituting a treasury that essentially took some of the positive inflation and and created a treasury to start to establish a growing price floor and so then you know it seemed like a pretty pretty interesting idea we started kicking it around more and more and uh next thing you know we just we're like we could actually just go build this in and launch this and i think we were some of the first in the d5 space to recognize this fact that oh yeah you can just go build a protocol and launch it and you know it can be that easy that difficult um as as of course is actually the the case

but um i think it really started a bit of a paradigm shift in that way and we'll go into the comparison to ample voice and the exact mechanism of the rebase and so on later but before we actually dive in you were actually the first of the food coins so yam was the first first of the food coins that kind of launched the food coin craze how did you guys come up with the name the name was just a wonderful confluence of factors i think um so obviously we uh had this rebasing token similar to ample and we wanted to do it in a fair launch mechanism like wi-fi so we just basically took like the y and wi-fi

and the am and amplifor it matched it together to make yam and then it had all of these really nice kind of benefits associated with that you know three named ticker the emoji having that that ownable brand asset directly in the the keyboard um it's it was catchy obviously the yield farming um was already a big meme so it was just a kind of perfect confluence of of factors there's just like a web show i used to watch uh called jake and amir and in that yams was also this like weird meme that they had in that and so i don't know if anyone did any of you watch that show or okay just completely i don't know i don't think so but i'll

check it out because that that's pretty funny nice cool and so what was sort of like the role of each of the people on the team like who was sort of the like the coder who was the mechanism designer or sort of the work sort of split kind of like evenly amongst you guys yeah so um brock was the one who who did all of the the engineering and just just did this 10-day engineering sprint clinton was all of the front-end development dan was kind of the one who assembled and organized us all and then will and i were largely involved in kind of the economics the strategy

um just general kind of uh everything that didn't involve like the actual code um including sometimes some data analysis and uh things of of that nature and not all of you are still involved right so who's still with them the project yeah so most of the original launchers have kind of uh gone on to their own new endeavors in in whatever capacity those may be um clinton's on slingshot which is a new dex aggregator dan has a new fund called nascent um i think will is hopping around a bunch of uh different projects and still providing some some guidance to yam here and there and then it's really just brock and i

who have uh decided to to keep really grinding on on yamm and uh steering the steering the ship with a really fantastic group of kind of core contributors who have assembled in the yam community as well as kind of the general yam community so yeah let's get into then like the design of yams what would you say is the proposed like utility of yam and like you know was the goal what what is it meant to be this like you know the first thing that obviously pops out at someone when they look at it is this whole rebasing mechanism is that was that meant to be like sort

of the flagship feature of this experimental project or was that just something that was you know how should we look at what was the point of this entire thing yeah you know i think it's important to remember that this was an interesting idea and experiment that we wanted to put out into the community and there's a reason that it was fully decentralized governance from day one there are so many ways you can take this kind of fundamental mechanism of the rebase used essentially as kind of a programmatic fundraising mechanism for this treasury um you know there's a world

in which yam actually goes and tries to be legitimate money and and you know is similar to ample forth in that way i think the way that it ended up playing out was much more like traditional revenue generating style protocol at least that's that's what the community has morphed it into so like whatever the concepts were at day one and i think it's 100 percent the case that each of the five of us kind of had different conceptions of how yam might evolve and what its purpose its purpose is it's a constantly evolving concept

that i think over the past few months of being in kind of the fully operational protocol and having this community uh working on it and ideating around it we've now isolated the kind of path that we're wanting to go down which is essentially this fair launch dao that seeks to really innovate it at the intersection of decentralized governance and programmable finance and loves this idea of trying new things building new things um in a way that kind of ties all of our financial incentives together and the yam community prospers and grows um as that that

ecosystem grows that's really interesting that you're saying well at least how i understood your answer right now is that there wasn't really a mission to start with or at least not a unified one between the five of you guys so how do you see the mission of of ample force because basically sunny and i did an interview with evan crow a couple of months back before ample fourth kind of embarked on the death spiral and he said that their intention was never actually to create a new form of money or a new stablecoin their creation had always been from the get-go to create an uncorrelated acid how do you feel

about that statement that's interesting i didn't know that that was kind of their initial vision i don't think it was so basically i think it moved during for whatever reason regulatory or legal or economic i don't know yeah i mean that's the nature of startups in a lot of ways right like these things that we're trying to do and kind of the thing that's going to find an interesting product market fit and be attractive to people is is of course going to to morph i think in our case specifically it is largely a product of the fact that this was from concept to launch was 10 days so it's hard to really

rally around and get super aligned on exactly one specific mission especially in something that's so kind of open-ended as cryptocurrency that rebases and raises a treasury you know there's there's so many ways in which you can you can take that one-inch is a decentralized exchange aggregator that sources liquidity from the top dexes and amms to save you money and time on swaps one inch finds the best possible trading paths across over 20 supported liquidity protocols and splits them up across multiple market depths i started using one inch last summer and since then it's become my go-to aggregator i use it

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the coin so basically why would anyone interact with this protocol i mean i i understand that there's that there wasn't a mission to start with or not a unified mission to start with but what would have enticed me to actually interact with your protocol yeah i mean the the value of yam is really in the fact that it um has the governance rights and control over the the treasury and associated with that you know any increased revenue that the treasury can generate um new kind of governance tokens that come into the treasury being able to participate in that governance it really is all fundamentally based around the

the value that the treasury can create and where does that value come from trent well i mean if you wanted to do some sort of traditional valuation uh you could in some ways do a the fundamental value of yam comes from the value of the current treasury and its uh future discounted cash flows i think that's one of the ways in which the community today has really started to look at how we want to develop and the the types of things we want to do is how can we leverage those funds that are currently in the treasury

in order to generate additional revenue in the future so whether that's providing liquidity in products that we build in products that other people build whether that's actively managing that treasury the protocol ends up being the in the yam protocol ends up being quite a complex piece in which you've got this essentially kind of three million dollar fund currently that that needs some sort of management in terms of uh both investments and expenses you've got the yam protocol itself which is this rebasing protocol with a number of tunable parameters um and some interesting game theory and

kind of different incentives going on there you've got a 5 000 i think maybe 4 000 token holder base that you've got to rally decentralized governance around and then you're looking at various additional products and protocols that you can build that can leverage that and grow that treasury so it's really a quite expansive protocol and community that that we've created and it's a lot of work but a lot of fun so let's talk about um a bit about like how the treasury works and especially in the v1 uh design it was very sort of integrated in with how the rebasing

mechanism works and so you know when i asked will about it though uh he the way he sort of pitched it was that like you know the point of this thing is that like we have that we're trying to exploiting human psychology in like in the sense that like you know there's just the rebasing just causes all this like wild specula speculatory like gambling game and but we're exploiting this by taking a percentage of the speculative value and putting it to work into this treasury that can then be used for public goods funding so can you maybe like first i guess to start off could you walk us through like a little in more detail about how this sort of treasury funding

works with the in the context of the rebasing mechanism yeah um totally and i i obviously don't agree with all of uh will's assessments there um but essentially there's the standard rebase mechanism which is that of course uh when the price of the asset is above the peg it will inflate the currency that is meant to decrease the price towards that peg and on the other side if it's below the peg it will deflate to increase that price and so essentially what the um yam rebasing does is it looks at the uniswap t-wop and currently we're our main t-wap

is actually two hop t whop that goes uh etheusdc yam etheusdc to get that one dollar price target so we're doing some some very fun tiwa popping but essentially it looks at the on a positive rebase the change in supply that is going to occur according to the rebase calculation and it takes 90 of that change in supply and distributes it to all of the the holders utilizing essentially scaling factor within the token so all that really changes is the scaling factor number which automatically adjusts the the number of yams you have

in your wallet and then it takes the in the v1 protocol takes the other 10 of the supply mints that supply and then sells it into the uniswap pool programmatically to then raise funds for the treasury um so you know one of the ways that i've i've always looked at it is we're using rebasing not so much in this way to to like get this price stability like like ample fourth wants to to go for we're specifically using the rebase mechanism to measure demand and then operationalize that demand to raise funds

for the treasury i see and so every time there's a increase in demand you take a portion of that increased demand and basically capture that capture that for the treasury yeah exactly um and you know there we've heard uh you know a variety of pushbacks to this uh to this mechanism you know both outside and inside the community and it's kind of an ongoing discussion of exactly um you know how this rebase mechanism should uh kind of operate going forward what are some of the most interesting pushbacks a lot of the community basically looks at it as uh attacks on holders i think

part of the negativity around the the existing function is you know what we saw when we went from v2 to v3 which was in v2 yam has this uh you know 100 million dollar market cap and we go into v3 and we have these really high prices you know five ten dollars that that then start to get rebased and if you're in the pool at that time essentially you end up giving your stable coins up in return for for yams from the treasury um and so ultimately what we saw was just a a pretty significant um collapse in the the market cap a death spiral

if you will so i think i think there's still a lot of negativity from from that the way i really look at the treasury funding rebates is not that similar to or not dissimilar to essentially for the whole yam protocol um a bank that issue shares uh of equity in order to raise capital it then deploys that capital to generate revenue for the equity holders and then when it wants and it you know trades in a multiple of its of its book value and if it wants to raise more capital to uh you know deploy more and generate

more revenue it will then issue shares again rather than that process being something that uh you know a corporate board is deciding and you know whatever whatever that exactly looks like in yam it's the exact same process but the protocol itself is is measuring that demand and issuing those uh those tokens but ultimately what what ends up occurring is that everyone not in the liquidity pool receives a small amount of dilution and everybody in the pool receives a greater share of the the network which in general is i don't think anything

super novel in terms of how many protocols uh distribute new tokens into the market the only thing that's really revolutionary here is the fact that it's done it's done programmatically and there's then of course associated with that less predictability in terms of like that total number and exactly it's a little bit harder for i think many people to understand exactly what's going on it's more predictable in the case that you know exactly the factors that are going to lead to that event occurring um but yeah it's a complex thing so but this could have been implemented

in such a way that once let's say uh some price target of yams is hit then it mints new yams and uh sends them to the pool and like just sends them to unisoft and like collects adds to the treasury why was it beneficial to combine this process with the process of like what would be like a stock split you know why not just mint the minimum amount of yams needed in order to add to the treasury each time that some price target was hit yeah i you know i think that's a that's a great question and i think you know that's one of the kind of rebase replacers that has has been disgusted

at various times in the uh the protocol you know i think there's a large degree to which we're in many ways just dealing with what was conceptualized as a interesting experiment that was mashing up a number of kind of mechanisms i think there is a degree to which part of it is just the the fun the speculative fun around rebases um and how that does play into uh you know the the psychology of the the space i personally wouldn't recommend anyone listening to go launch a rebasing protocol because the the hassle of it i think is is

far far beyond the uh the fun of it but you know we also launched at a time in which rebasing was still a very poorly understood mechanism i think i i remember kind of around yam seeing all of these takes on rebasing rebasing assets in which people just clearly did not understand what this mechanism was and and how it worked even like people i would consider uh fairly smart in the space um i think now we've seen so many at this point that the people mostly have a handle on it and that it is essentially a stock split so um trent um can you shed some light on the game theory behind this so

basically in a rational uh world how would i behave i mean if you look at the rebasing your yam becomes worth less right so basically the optimal strategy would be you know in on like uh in a very naive view the optimal strategy would be to um sell your yam before the rebates and rebuy them afterwards but then basically everyone could do that and even those people who do that could be front run so basically what this is an equilibrium what's the game theoretically optimal wave to be a way to behave in these settings yeah so there are kind of a number of factors and roles to to consider and

will price does on our uh yam finance medium publication have a great uh article on you know exactly what his view of the the game theoretical optimum is in general it's just about understanding how the supply changes and how essentially the the price impact of the rebase cell are actually impacting various uh various holders so you're saying the the optimal strategies to sell before the rebase and then buy back right after oh no no i'm asking so i'm asking basically very naively if on you

know on a first level interpretation that would be a good charity right oh well uh no um in general not because you're not just paying attention to to price right you're also um actually having a percentage ownership of the essentially market cap and network in total which after a rebase is going to be you know for one yam after a positive rebase that inflates the supply that one yam before the rebase is going to be a higher percentage of the supply than that one yam after the rebase so in general you actually would want to keep your your yams through that rebase

um wait that's for a negative rebase right no so the positive rebase increases the the supply so and then 10 of the of the yams go into the reserve right so basically then i'd be better off selling before the rebates and then rebuying just after the rebase with that same dollar amount um yes there is uh if you can time that price slippage correctly you actually can get yams at a uh at a slight discount in that in that scenario yeah correct but then that's public knowledge so anyone can use that hack um and then basically you have to front run the people who are using that hack

to sell before them and buy uh people before them right so basically um it's a i mean it's kind of like a recursive problem so is there is an equilibrium i would imagine that there is uh there is some sort of equilibrium that would uh emerge what do you see happening in practice so in general uh we do see a lot of people not so much the the front running cell but we do see a fairly quick as can be expected a fairly quick buy back up of whatever that um rebase sell has impacted the price

so originally that in v1 that price impact could be as much as 10 it's now lowered to 5 but we do see that there are many people who are actively monitoring for that specific arbitrage opportunity that does exist especially in comparison to what the actual uh kind of inflationary event was there is a very specific amount of price impact that should have occurred based on the amount of new supply that's minted that's closer to like one-tenth of whatever the the actual market impact is on the cell

so we see people uh reading that pretty accurately do you have any so you said earlier that at the time when you launched yam finance protocol um people weren't as familiar with um the rebase mechanism as they are now do you have any qualms about having launched at that time because obviously i mean someone's footing the bill right so so if you look at where the money comes from and who actually ends up profiting from yam finance as a protocol someone's actually paying for that right and as with many governance tokens it's often the retail user who then buys the yam token

on the secondary market um how do you feel about that yeah it goes into some of my general thoughts about these these community launches and kind of what the best way to approach them is i mean i think the the kind of astronomical market caps that the em achieved were ended up being really detrimental to uh to a lot of people and i think you know a lot of people end up blaming the the rebase for their for their losses in these cases maybe at some sort of technical level that's true but more generally based on the market i don't i don't know that it is in general

the people who really got um who suffered really heavy losses were those who were lping throughout that kind of market cap price collapse from you know 100 million to 10 million in general as with any lpn situation if you're bullish on the on kind of both tokens in your in your pair this is just kind of a general pool too if you're bullish on your pool 2 tokens then in general it's not necessarily super detrimental for some price price impact to occur and you to accrue more of those

those tokens so you know if we're looking at yam at its current market cap i think uh being an lp is a really positive ev play because on those positive rebases you're actually earning you're actually purchasing a higher percentage of the market cap than um those who are who are not lp so the long-term bullishness is is you know of benefit there but at the time you actually incentivized lping right so basically um you dropped yam on people who provided liquidity um in the yam uniform yes i mean the protocol uh the protocol did that as was always its um

extremely explicit functionality you know as i was saying earlier i think one of the things that we've seen especially lately from some of these community projects is that if you build up really large really diverse community extremely fast i think almost all of the time it ends up backfiring in some way shape or form i think one of the smartest things that a kind of decentralized potentially anonymous community-based protocol can do is to kind of begin by building

quietly with a really strong product i think that's something that like empty set dollar did um esd and i think they've they've achieved some really fantastic things because of that mechanism by which you can with a small group of you know committed interested participants kind of grow in a more sustainable way right so speaking of this like community and like growing it very quickly you know we talked about the ample for the fourth east side of yam let's talk about the yearning side of yams which is

one of the things that you guys did which was very interesting was this staking of other d5 tokens and i i maybe it's not the first one to do something like this i'd say maybe like ed edgware was maybe one of the first ones to do this idea of a lock drop but you guys like took it to the next level where like you allowed eight different tokens to be locked essentially in order to earn to import the community and so how did you guys come about doing this mechanism how were these eight tokens chosen yeah it's funny we were i mean when we were building this we were just like kids in a candy shop being like oh this is cool this is cool let's throw this in

there um and you know obviously when we brought in the fair launch and the decentralized governance we knew that if we had this decentralized governance we needed a really strong community to be able to operate and participate in that and so essentially what we looked at was okay urine did this um you know stable coin farming we don't actually want the big stable coin whales to be the ones that are helping govern this weird decentralized protocol we want the people who have participated in governance before and who know how to operate you know defy on hard mode and so that's really what we

started to to look for in terms of tokens that would be included in our in our farm these really strong really strong communities that could get the word out could participate in governance could understand the rebasing mechanism and so we really just thought about how we could build the community that we wanted to to see i think what ended up happening was that anybody in crypto at all anybody in d5 at all all of a sudden had a way in which to earn and participate in the the yam cam protocol which in some ways is is a really exciting

amazing thing i don't think that was entirely our intention and i think that was a part of the reason it gained such like just astronomical heights in such a such a short period of time and so when you guys did as this like fair launch you know i guess yeah obviously this is meant to be sort of a side project for you guys can you help me understand like you know now after you yearn and you guys have been way more fair launches how does the like founding team you know fund themselves to do these kind of things like you guys it wasn't a full-time thing but like when andre launched

wifey like how did he like profit off of it and like you know make it worth his time to do it and is this something you guys thought about as well when when launching it it's a great question and it's a you know kind of difficult difficult problem to solve in some cases we were doing it as a side thing so again it wasn't entirely necessary to fund ourselves through it in the the beginning vm protocol builds up a treasury which can be used to to pay contributors and i think we've seen a lot of kind of protocols after us implement some sort of dev fund that can um be used to fund the

protocol's development but you know in terms of like pre-launch funding i think it's um you know quite difficult you've got now things like fair launch capital and you've got like the the molly and andre or molly and alpha fun that they've they've got going for for some of that but i mean it's it's quite difficult to find the 50 to 75k that you need for a for a major audit of a new protocol that you want to launch launch fairly so yeah it's it's kind of a constant problem to to navigate and try and find creative solutions for can i kind of change gears and ask you

about the governance of the yamdao so you guys use snapshot which is a product built by um balancer and arrogan it's it's a fantastic project a lot of fifa dows use it now and you were one of the first right we were indeed we were the first you were the first how did you um how did you get connected to the snapshot guys and basically how did you hear about this what was your thought process in moving to um snapshot and just for the listener so basically snapshot is a tool where you um signal by you need some sort of token the governance token and then kind of signal at a particular point in time and then basically there's a snapshot taken as to

which uh vote came out higher yes or no uh proposal one or two or whatever yeah so we really use snapshot as our consensus gaining mechanism prior to an on-chain proposal you know we're fully committed to fully decentralized governance so really nothing in the in the yam ecosystem can can get done at a protocol level without it going fully on chain but snapchat's a great solution in that uh we can just write some words on a web page and then have people vote on that prior to fully developing all of the the necessary code and you know doing

all of that that work without knowing what that what that community consensus is um and so you know i think part of it in the early days was just a timing and exposure issue in which i think everybody knew yam had uh had some governance that that needed to to take place we were very much in the spotlight and we were actively looking for something that would allow us to get direct token holder consensus and so the balancer guys reached out and then got connected with with snapshot and we were very happy to be kind of the testing ground for uh for their tool which now is like used by seems like hundreds of uh

various dows so yeah really really fun to kind of play play a part in their story as well so what are your takeaways from community governance with them off chain voting or offline governance in a way again it's a it's an extremely useful tool for us as a step in our governance process you know our governance process really starts in discord with uh just chatting about various ideas proposals it then goes to the yam forum where a more fleshed out proposal is submitted and people can kind of discuss poke holes in it

we have a kind of signaling votes on the forum and then it goes to snapshot governance at which point it's not just like if you click the button on the forum page it's actually how many tokens do you have what is your actual stake and governance power and then we can use that to go on chain and kind of do a variety of batching of proposals on chain for um kind of to to help lighten the the weight of that governance overhead and process but it's a it's a super important tool in the the arsenal of vm governance for sure how was the like you know one of the

parts of the you know yam origin story and myth is that like you know it it was went from idea to deployment in like 10 days and so like what what was that process like especially when it comes to like writing the code and stuff you know normally projects take obviously something like cosmos is like a completely different thing but like you know in our heads it's like oh this is gonna take like eight months that ended up taking us like 24 months how did you guys manage to like actually execute and deploy so quickly it's a great it's a great question um i mean brock is really a very fantastic engineer with a great kind of already built in understanding of

deep knowledge of compounds protocol in general so there was some synergies in terms of adding that governance module the staking contracts from snx and wi-fi are pretty straightforward and uh you know then a lot of it came down to the the rebasing and treasury components basically he just code sprinted for for 10 days there were a number of there was extensive testing but um you know i think brock's recently not recently recently as in four months ago after this issue kind of revamped his entire testing suite and has built a lot of

kind of custom stuff for that and by the issue you refer to you're referring to the big bug right the big bug that is that is correct can you walk us through the big bug i mean that was the one of the one of my darker darker moments i think for a lot of us um so basically uh shortly before the first rebase basically kind of uh you know an hour or so before we actually forked mainnet and ran the the rebase essentially in in production as it was as it was operating um and then began to notice the issues so we then started to obviously community communicated that to

the community and um you know started to look at uh various solutions and so we were at that point in conversation with a number of uh different people trying to think if there was going to be a solution to this issue and essentially it seemed like there was going to be time to get a governance vote in what was unrealized at the time was that the execution portion of compounds governance module right at the the time of the last step in the the execution governance process actually does one more check as to whether quorum has been hit and so you know it's one of the lessons of

this whole thing is just how complex these systems are and the interactions between them i think especially in a situation like this in which once this bug is introduced it's it's no longer the system that brock designed and so it becomes a totally different thing with uh kind of new emergent emergent properties and so it was yeah it was a total total nightmare i thought we could could save yam i don't think i've ever or will ever see global coordination effort like that again in my lifetime in uh you know under 12 hours it was insane insane to see and then it's uh

it got quite dark again after that when uh it was discovered that we could not actually fix the uh the bug and the protocol was bricked even though it ended up not working i thought like the recovery effort was like super cool to watch because like you know we're all like watching that over that that uh recovery bar and then like at some point it like overflowed the webpage itself and i thought that was like something really cool to watch what are like some of the other highlights of the process like what do you think did go really well in the recovery process and allowed you guys to do this sort of like global coordination i think it was just a combination of

how exciting it all was and i mean i think we've seen this kind of all throughout defy summer how drama filled and exciting this this space can be and people love to participate in that and feel a part of it i mean it's it's people have called it like a massive mmo it's like yeah we're all playing a co-op video game it's co-op pvp depends on the the day and the the person i suppose so i you know i think that's a huge a huge part of it was that it was a moment in which we can all kind of play and do this this thing together and it was truly very special to to see you know i think after that

it really was just a kind of somewhat grueling process of okay how are we going to make this right with people how are we going to allow this experiment to take form if people want it to take form so obviously like when when it happened we essentially said okay if the community funds an audit we will get the protocol audited and and redeploy and you know within two hours that that audit had been funded and then you know i think for for brock and i especially it felt like it was our responsibility to essentially clean up the mess and so we felt that that was really important

for the the community and the people that had been involved and had done work to make this thing happen it felt like it was our turn to uh to put in the work to to make it happen and so that's what we did we went through this uh v2 governance process of um you know this migration and this kind of voting period on what v3 was going to look like and then the final v3 migration and we've really just been focusing on building a community of contributors that are aligned with the vision that that exists and that has emerged um and who really just want to build cool things in d5 and kind of explore what these

these bounds are and so it's it's been really fascinating and fun to see kind of that emergent community come about so if you were in your own shoes six months ago would you do this again and if you would do it again would you still put your name to it well i would certainly not do it exactly the way we we did it i you know i think we kind of we obviously massively massively underestimated the uh amount of attention and excitement this thing was was gonna generate

maybe that was a little bit of naive of us at the time but uh it certainly looks naive now based on how some of these things operate but at the time we had no idea that this is how it was uh that it was gonna go so would certainly get an audit um i think the anonymous aspect is is quite interesting i think one of the reason that it did blow up in the way that it did was um because brock me will and dan and clinton kind of all like have been in the space for a long time and there was some kind of reputational legitimacy that we gave the the project despite the fact

that it was this 10-day 10-day thing going back again to this idea of you know a little bit more slower sustainable growth in a community launch project i think if we had done it under pseudonyms that that would have been more the case and things would have gone more aligned with our our expectations um but you know we didn't want obviously some people knew what we were doing and that we were working on something and people were gonna know who we were we didn't want it to be a weird thing where it's like oh the insiders are building something and like the other insiders know about this thing and like we really wanted it to be a true fair launch decentralized uh

protocol and you know in many ways that is indeed what we got do you think um sushi sushi swap would have gone even faster if the identity of nomi had been known that's a good question i think uh probably but it also it also depends i think ours would have gone slower but sushi swap coming right after us it was so clear what was going to to happen maybe would have been a little bit a little bit faster if the uh if it wasn't in a non founder but i think the wave had kind of started at that point

what do you think about like you know your role in this like yams's role in the creation of this like whole food coin movement and do you think this was a what do you think about it's like impact on like the course of defy yeah it's super weird i've obviously have some mixed feelings about it but there have been a lot of great things that have come out of it i mean i think i think sushi swap is is probably the the best example and what we're seeing with kind of the the why the wire and alliance has has been a really cool emergence that's kind of come about from all of this but my general thought is that in a space like this

all of this does seem inevitable at some point there's nothing stopping someone from deploying code and uh forking projects and for so long there was no real monetary incentive to to actually do that we kind of hit this it started this bull market and all of a sudden there's monetary incentive oftentimes really large monetary incentive to fork a protocol and and start doing this it's like did yam kick it off or like was it pretty obvious that like this type of thing was possible and all of a sudden the incentives aligned to actually motivate people to to do it it feels

like we may have been on the front end of the the zeitgeist in that moment but it was all gonna play out something like this anyways do you think that the food coin meme had you guys created such a good meme in is what i'm thinking of like you know if you ever seen those like youtube videos where people like pull like these like really like mean pranks and stuff and they're like oh no just a joke bro it's just a joke like do you think it's like this whole food coin meme and like oh no just an experiment bro like you know just a food coin but that really like you know maybe there's something more malicious going not in the case of yams but like

in you know yams on if you look at the github repo it has 251 forks one of which is mine do you think that was like do you think your meme got perverted into something that you didn't like in a lot of cases yeah absolutely it's also you know i've never seen front end interface forked like that it was really quite something to see that just like become a standard i've never seen a front-end interface become an absolute standard so you know definitely hats off to clinton for for that work it was really really cool to see yeah i mean it it of course got got perverted and

a lot of it is similar to kind of my early argument that as soon as these incentives align to motivate this behavior like the scammers come out of the the woodwork and i don't like having been a part of providing them an interface for doing that and providing them a highly marketable meme for for doing that but it's also the nature of the space to latch on to memes and riff on them definitely didn't quite predict how much this one was going to take off i think one of my favorite moments in all of this was the the web page that came up that was uh you know every single food emoji dot

finance um available for for purchase and there's the little thing like we'll take like btc and then yam and then like they crossed out yeah i just thought that was really i thought that was really funny and so let's talk about like what's the looking forward for yams uh now you know one of i think the main shifts i see is that like up until or at least you know previously the most of the treasury accumulation was coming from intended to be coming from the speculative value of of yams uh and like you know as the demand increases that adds more to the treasury

but now there's now there's like a large push in the community towards creating more cash flow like other sources of cash flow generation for the treasury and so uh can you talk a little bit about like what are some of the projects that are happening in this uh regard yeah and so this was kind of always how i again imagined the the treasury would work and how the the protocol would would work if we're just amassing this treasury and not doing anything with it um it's like it's that's that's not exactly a great deal for uh for investors so it's like what can we do with that um those treasury funds that that we accrue

that actually uh return value for um yam holders and so over the past you know couple months we've really been working on a variety of ways in which we can we can take this so some of it has just been pure investment so we've built out some custom otc contracts that we've executed large purchases of uh eth and dpi and so that's a cool contract that uses t-watt bounds to ensure fair pricing um and allows a dow to actually make an otc trade which is uh quite interesting and then we took that ethan dpi and we're farming index with it so we're generating some some index revenue

we've also got we're incentivizing yam eath liquidity on sushi swap and so when people deposit into the yam incentivizer we actually then take that slp and put it into the sushi bar and actually earn sushi for the treasury and so there are a number of kind of treasury management type things we've been working on our kind of upcoming one is the yam dao set in which were working with set to use their v2 contracts to have a more active treasury management system that still retains full trustlessness so we're essentially hiring a set manager who is going to be krugman uh on on twitter

who's actually currently the second second largest aum on set protocol so essentially targeting some correlation numbers and just general allocations that then can be rebalanced and managed in a more active way that also will have a management fee that other dows or investors can actually participate in the management strategy that that were that we're following so we've got that kind of treasury side of things when it comes to the treasury side of things how do you make sure that like the governance of this is like nimble enough to make decisions in timely manners and like also how do you make sure like you know because all of these

decisions now are public and have to be voted on how do you make sure they aren't like front run basically yeah i mean that's a how do we make sure we're not front run it's it's i don't know there's a whole lot we can do there the set collaboration is really our attempt to combat the degree to which every single movement of treasury funds requires a one to two day forum discussion two day snapshot two and a half day governance process so it's like there's a minimum five days to do anything with the treasury once we get it into the v2 set we're going to be able to make some of those changes on a much faster

time frame we've orchestrated the treasury manager contract to have certain guard rails so like the set manager can't just like add a new token or add a new farm kind of willy-nilly to make sure that you know those those uh treasury assets are still really safe and secure and we don't have to trust that that krugman has uh has the m's best interest in mind even though he does trying to really balance that being nimble and having that that active management side of things but also you know we've we've got to be really careful in how we're we're doing these things there's a lot of people's money at stake and decentralized governance moves

move slow um so we're we're thinking really actively about how we can always be be more nimble but also um still retain the trustlessness decentralization and security um and you're going to talk about a little bit about the uh before i cut you off you want to mention some of the other stuff that's being built yeah a couple other um of kind of our major product pushes are i think by the time this epic episode comes out we'll um have announced our uma collaboration on a product suite we're calling uh degenerative finance um so d-gen derivatives so essentially these are going to be a variety of derivatives built on top of

uma's infrastructure that will allow d5 users to essentially speculate on a variety of kind of on-chain d5 metrics so the contract we're taking over for uma is the u-gas contract which is essentially a one-month gas future we're looking at some impermanent loss hedging some total value locked derivatives volatility derivatives so the building out this general product suite on top of uma contracts which which were really excited about that collaboration and they're obviously an excellent team to to work with so building on top of other protocols is something we're definitely interested in doing um but we're also building uh currently a

a you know defy lego insurance product called umbrella that essentially takes a uniswap slash balancer approach to the creation of these insurance pools that an underwriter can come in and underwrite what we call a meta pool that consists of various contracts that it covers and then protection seekers can come in and get protection on a single contractor protocol specified by by the metapool and so i think one of the really cool things about that besides its um kind of trustlessness and uh ability to build these different configurations and have different uh

kind of pricing models and things like that i think one of the big differentiators is the degree to which you can get coverage on specific contracts so you can imagine for instance a a urine meta pool that has each vault included in it and rather than having to purchase protection on just urine in general i can say okay i have my funds in the yusd vault that's the one that i actually want protection on so i don't need to necessarily be paying for all of these uh all of these other vaults that are that are included there are a number of other kind of interesting

things but i i think that's one that's um it's going to be quite interesting and different from the existing protection protocols that we've seen pop up in the last in the last couple months and so who's doing like the building and designing of all these things so like is it still mostly you and trent or are there other community members you know i think one of the most fascinating things about urine is how they successfully managed to like grow the development team how has that been going on within the yam community yeah i you know we've assembled a really cool group of contributors kind of across a number of disciplines so

you know we have brock and nate welch who is a former total engineer are really kind of leading our smart contract work and doing a lot of that development we've got full stack developer called xerox that's handling a lot of our front end we have a couple brand design marketing folks that are looking at both our marketing execution our interface design and branding as well as like kind of these mission statement and brand pillars um that that we've been rallying the the community around as well as just a number of people who are focused on you know operations strategy ideation uh

kind of general product and project management so we've assembled a great a great crew and we're kind of currently in the process of onboarding some of them to be full-time contributors that receive uh monthly payments and in terms of like the governance process with that we've deployed actually a new a new governor so we have a multi-governor model and this the compensation governor essentially has a lower lower quorum requirement so it can be kind of managed by less people but it's got a much longer time delay such that the um kind of main yam governance can always uh go and cancel any proposal that that is

that they don't agree with uh so we've been doing a lot of this kind of organizational building which has been an interesting experience outside of the framework of you know typical company structures so you know we're a little less probably laissez-faire than urine is in terms of their like uh you know just come literally here's the github do whatever you want we probably have a little bit more more structure but yeah cool yeah i mean this is really exciting like you know that whole brand exercise thing you mentioned that i thought it was you know i read through it i i really liked that i felt that it was like such a honest evaluation of the entire like you know current status of the

public percep of the brand and like and where we want to go i feel like more projects need like you know i'd love to like i actually shared it with a bunch of people at cosmos and being like hey we should like do this brand exercise for cosmos as well because i just thought it was very well explained and done yeah and that was like step one that's contributor name named jim he goes by designer he is actually you know like a brand brand strategist guy and so he came in and said okay let's start with these brand perceptions where are we where do we want to go and then kind of took it to these brand pillars of okay this is i think what yam stands for based on its its history and its current community and then kind of transform that

finally into a cohesive mission statement that um you know we got like kind of tagline short form long form of you know this is what the yam community stands for believes in and is trying to to do in the world um and so we're currently ratifying that mission statement uh on snapshot right now so it's it's been really cool to see some of some of that work happening he's he's really excellent well uh thank you trent for coming on and like you know telling us about the story of yam for past present and future and as well as the you know legacy of yams and so yeah thank you and is there any uh anything else you want to share

or anything where people can learn more about any of the new projects that are being built and how they can help out yeah i mean one of our best places to to go learn about what we have going on is our our discord you can find the link in our twitter bio at yam finance and you know if you're interested in building in d5 on some of the things we're working on on some new things like we are very interested in you know collaborating seeing what we can can do and uh work on together and yeah it's an amazing community to be be involved in and thank you both for uh having me on here it's been a lovely time chatting with you um yeah very much appreciate the time yeah thank you for coming on

thank you thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on itunes spotify youtube soundcloud or wherever you listen to podcasts and if you have a google home or alexa device you can tell it to listen to the latest episode of the epicenter podcast go to epicenter tv subscribe for a full list of places where you can watch and listen and while you're there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released if you want to interact with us guests or other podcast listeners you can follow us on twitter and please leave us a review on itunes it helps people find the show and we're always happy to read them so thanks so much and we look forward to being back next week

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