Bankless - SotN#9 (PART 1) - PROPAGATING (WTF ARE YAMS, DEX VOLUME INSANE)

Episode Date: August 12, 2020

STATE OF THE NATION #9 (Part 1) - Tuesday, August 12, 2020 Watch on the Bankless YouTube Channel The State of the Bankless Nation is....PROPAGATING! The bankless boys discuss why. This is Part 1 of SOTN this week. Stay tuned for Part 2 with Vitalik tomorrow. ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⚔️ GODS UNCHAINED - TRADING CARD GAME - you own the cards - start a free account, play and trade! 🧙‍♀️ POLYMARKET - BET ON CRYPTO - bet your beliefs! - use it to bet on DeFi outcomes!  🌈 AAVE - LEND & BORROW YOUR CRYPTO W/O A BANK - earn some interest! 💸 AMPLFORTH - MONETARY EXPERIMENT FOR BASE MONEY - learn about this experiment! ----- Covered: WTF ARE YAMS DEX VOLUME INSANE PART 2: (COMING TOMORROW - ETH SUPPLY GATE) Special guest Vitalik Buterin We show:  Post introducing YAMS Active YAM farms YAM farm contracts AmpleForth Geyser $34B annualized in Uniswap volume Uniswap eating DeFi --- Episode Actions: Catch tomorrows episode with Vitalik on ETH Supply Watch what's going on with YAM contracts Check out DEX stats Also...subscribe to Bankless YouTube to watch State of the Nation every Tuesday! ----- Don't stop at the show! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit the official Bankless website for resources http://banklesshq.com/ Follow Bankless on Twitter https://twitter.com/BanklessHQ Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState Follow DeFi Dad on Twitter https://twitter.com/DeFi_Dad ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

Welcome to State of the Nation, episode nine. David and I are super excited about the state of the nation today. We're going to talk about what's happening like we usually do related to big picture stuff, drop some insights and action items. And right after we talk about our sponsors, I mentioned a few other updates today as well as the schedule. But David, why don't we start with our sponsors? You want to kick it up? Yeah, yeah. So I was playing with one of our sponsors' games last Friday and a little bit this weekend. God's Unchained. For those of you that played Magic the Gathering, for those of you that played Harstown, Yu-Gi-O, this is a game just like that. But instead, the cards that you own in the game are ERC-721 tokens on Ethereum. And so the big problem with Magic the Gathering was that it was physical. So you had to be across from a person with other physical cards to play them. So that kind of sucks. And then there's Harstone that came around so you can play over their computer, but then you never owned your actual cards because Blizzard just owned them on a centralized database. What God's Unchained does is they have the best of both worlds, right? Where you own your cards because they're digital assets on Ethereum, but you can play on the online medium that the world is now turning to. So it's a really fantastic game and with a really fantastic dev team that is kind of leading the charge with when it comes to ERC 721 standards and also gas on Ethereum. Check them out at gods unchained.com. Download the game. You can start without having to buy any tokens and without having to buy any cards. They give you the basic starter pack that

you need to get started. It's a really elegant UI, really elegant at the whole experience. And it's just a ton of fun. I played it all weekend. Absolutely. All right. So the second sponsor we want to tell you about is AVEA. Avi is a long time favorite of the bankless community. So it is a lending and borrowing protocol at its core. So it's all defy. It's all bankless. What you can do is deposit an asset into AVE. You do that by going to AVE.com.

So an asset could be any ERC20 token, like a die, for instance, or an ETH. And what it will do is it will provide you a yield on top of that. So you're effectively lending your assets to the protocol. That's one side of the market. The other side of the market is where you actually borrow against the protocol. And the unique thing about AVE is they don't just offer variable rate loans. They offer fixed rate loans. So with most DFI protocol lending, what happens is the interest rate could change on a day-to-day basis.

With AVE, you can sort of lock in that interest if you're borrowing something from the account. So they are just crushing it in terms of popping up the defy leaderboard in terms of total value locked. So there's a lot more going on inside of that protocol. Also, they released Avanomics, which is super exciting. That is some token economics to their protocol. One of the big things, there's lots to highlight about it, but one of the big things is they're actually going to be putting a percentage of tokens, of reserve assets into sort of an insurance type of protocol.

So if something happens to Avey in the future, that can be paid out. So that's going to be included in Avanomics. We will include some links where you can check out Avanomics and you can check out AVE. But if you're looking to get started and just try a small amount today, you can do that at AVE.com, Aavee.com. Check the show notes. David, what are we doing today, Sarah? You know, I didn't ask you how you're doing, but how are you doing? I'm doing fantastic. We've had we just release a just killer episode with Andre Cronier, who was the creator of the Y-Earn and the Yiffy Protocol token. That just went out on the podcast stream on Monday. If you haven't listened to that, give that a listen.

There was some fud going around from this decrypt article about how Andre is close to quitting. And then Andre also came out on Twitter saying that that article is not accurate. And so I feel like people really turn to listen to this episode to really get a glimpse as to what the hell that that decrypt fud article was even talking about because it wasn't entirely wrong. Andre did say that he was fed up and really tired with what he's been building. but he did not at all allude to how he is bailing or quitting. So for more details, listen to the podcast. Absolutely. It's a fantastic podcast. One of our most downloaded actually first days.

So it's just crushing it. And it's super interesting. It was called Dents, I think, on Twitter. So take a look at it, maybe listen to it a couple of times if you need to. The other thing is a bankless nation is growing like crazy. So we hit a really cool milestone yesterday, which is 10,000 subscribers to, the newsletter where it all started. So we just want to thank everyone for hanging with us and being a part of this community. It's just been really rewarding to see. Bankless is not even a year old.

And we are population 10K right now. 10K, yeah. It's a big city. Absolutely. So we're growing. We want to grow this into a metropolis and then eventually a full-size bankless nation, right? David, we should talk about the Eatscape shirts as well. So what's the latest? on those. We introduced those last state of the nation. Yeah, yeah. So that the ETHcape shirt, it's the it's the rare rare apparel platform that we're kind of building out and it's the first one, season zero we're calling it. This is going to be a regular rolling out seasons of new awesome scarce merch. And what we

did was we made 50 shirts and we also made 50 tokens. And if you want the shirt, you buy the token from Uniswap and you burn it and then you get the shirt sent to you. And so somebody's already redeemed one. So their shirt is in the mail on the way. Looking forward to hopefully seeing a tweet come out on Twitter from some guy wearing the ETH scape shirt. And so we had this set up into two phases, right? So we had like this initial phase where the buying demand on Uniswap would suck up some of the tokens. And then we would start to release the tokens as well. So like what we did is we supplied all tokens to uniswap every single one, you know, one ETH per token. And then the purchasing power would include.

the price of the token and then we would in we the plan was to withdraw liquidity and sell as the price went up to keep that price dampened and and and shallow until we ran out of tokens and so the first phase of that what happened and then we realized that with uniswap as a distribution method it kind of runs up against a wall in that second phase right and so the price the price got too high and we couldn't sell them because people weren't pushing that There wasn't enough supply. And also, and the demand wouldn't reach that certain threshold.

And so there wasn't really a good way to, like, offload these. And so we're working with the balancer team to try out this new mechanism that they, that they've always discussed and always, like, kind of promoted as a potential use case of a balancer pool. And it's basically a Dutch auction. And so what we're going to do is as we build out the system with balancer, we're not ready to do that yet, we're just kind of talking about our plans. what we're going to do is we're going to withdraw the remaining liquidity from uniswap and then put it all into a balancer pool. And so there's going to be like the remaining tokens that we have.

It's going to be like 40, 38 tokens, something in that ballpark. And we're going to supply all of them into balancer with a very low supply of either die or ether or something. And then these supplies cross over time. And the price of the tokens will tick downwards at a rate over time and time and time. And so when prices will go down and then there will be only so many shirts, only show many tokens that you can purchase. And as you purchase on, the supply runs out, as the price lowers. And so the price will get closer to zero over time. But before it gets to zero, it's likely that all the shirts will have been purchased because people will buy them for more than $0.

And so at some point between where we initially set the parameters at, we're going to set it really high, something like $3,000 a shirt. and then it's going to trend towards zero dollar the shirt over time. And somewhere between those two ends, all the shirts will be bought. And it kind of does work like Uniswap, like when you purchase a shirt, the price goes up, but the price will go up and then continue to tick back down over time until either all tokens are sold or the price is zero. And so this is just a much better way to distribute these things. Uniswap isn't really a distribution mechanism.

This Dutch auction from the balancer system, I think it's going to distribute these things, because we don't want these tokens. Like we want you guys to have these tokens. And so this is a way for us to get, to get the tokens out into the ecosystem so that people can actually redeem these shirts. I don't want to just sit on a box of really awesome shirts for months on end.

So that's the update with that. Absolutely. That's going to be super cool. I mean, so the summary is basically phase one was successful. The market found a price for these shirts on Uniswap. It's still active. Now phase two, we've sort of changed plans to move phase two,

a Dutch auction type model where all of the liquidity is essentially off of our books and into the market. I think that'll be great. Very exciting. We don't have an ETA on that though, but stay tuned here for that and you'll be first to know. Yeah, there's a reason why we label this season zero, not season one. We're still trying this thing out. Yeah, absolutely. And the market is definitely having fun with figuring out what the price of these Eatscape shirts are. I mean, they've moved quite high, and now they're sort of back to mid to your last I looked. It was like, you know, $700 or something for it. All the way up to $1,800 and then people started to let's a lot. Yeah, that is a lot. I love the shirts. I'm not sure I'd do $1,800 for one shirt,

of course. All right. So what else are we doing? So this state of the nation is going to be a little bit different this week. So we're actually going to release this in two episodes. There's going to be a part one, which you are listening to you right now. And we've recorded a little bit, yeah, first, we're going to stitch these videos together. And then there's going to be a part two. The part two is actually going to be on ETH supply with Vitalik. We think that that deserves its own dedicated episode. And we wanted to get this episode out to you today because we've got some super interesting, time sensitive topics, one in particular that we're talking about. a little something called Yam, which is kind of hit the bankless community.

So that's what we're going to start with today. That's how it's going to be divided. So expect two State of the Nation episodes this week. It's a bonus week. This is just part one. Stay tuned for part two. I don't know, Wednesday, Thursday, sometime this week. We will release part two with Vitalik, where we are actually talking about the

ETH supply gate, as you call it, right, David? Yeah. That's what that's what's what's going around in their circles. Absolutely. Well, let me ask the question. I guess we're going to do this question twice. I'm not sure. Maybe there's just one state of the nation.

But David, what is the state of the nation this week, sir? What are we using? The state of the nation is propagating. Oh, it's such a perfect word. So bankless just hit 10K. Bankless Nation, 10K large, fantastic. There's people flooding into the Discord. If you guys aren't in the Discord, join it.

It's where a lot of the awesome conversation happens. Meanwhile, in Defi, there's this, new thing called Yam, which is the Yam farming revolution. It's a new cycle of the season. So that has now propagated. The DeFi ecosystem, like the first users of Uniswap, that number has gone through the roof. So Uniswap users are propagating. The techs about Defi continue to flow in. Everything is propagating. Everything is propagating. Yep. And we are recording this intro, actually, post-YAM launch. And we recorded the YAM section. And we recorded the YAM section. of this pre-YAM launch.

So it was just like an hour, an hour and a half before the launch of YM. It has launched and you can find out more about it in real time. All right, David, we should get right to it then, sir. Right. First, before we talk about Yams, we got to get into our second round as the sponsors. And then it will be clear skies after that. Awesome. All right, David, let's take a minute to talk about two more of our fantastic sponsors.

The first is Polymarket. Polymarket is a prediction market with a very simple and understandable user experience. You can use it to express an opinion as the likelihood of future events. We've written a tactic about this. We will include it in the show notes. It is fantastic to use. You can bet on future events using ETH. You can bet on it using Dye.

It's very much like a wisdom of the crowd sort of phenomenon. So you can go there not to gamble, but also to go. gain a glimpse into what the market's actually predicting about things. Things like the total locked value in defy, things like coronavirus metrics, things like the U.S. government and election outcomes, all sorts of things. Go to polly.com market and check out the markets that are available. You can tweet about it and tag polly.commarket when you do. And if you do that, you can email hello at polly.

dot market with bankless as the subject line and they will cover all of your gas fees. So make sure if you're using Polymarket, email hello at poly.com market with bankless in the subject line. They will cover your gas fees, which are not insubstantial at this point in time. So check it out, check the show notes out, and get into the prediction market landscape. All right. Our second sponsor is Ampleforth. Ampleforth is a pretty interesting experiment. going on in Ethereum right now. Ampleforth is a base money asset, right? So it's trying to be an M-0, and it has this clever little mechanism built into it. So it tracks $2019. But it's not a stable coin. And so it has this very interesting mechanism where as the price of Amplforth goes up and down,

it will rebase. And so if the price is above a dollar, it will rebase by minting everyone new ampals to bring that price down. And if it's below a dollar, it will do the opposite. and it'll burn amples from people's wall, it's to bring that price back up, right? And so it has similar values to Bitcoin in that it's non-dilutive. And so if you own 1% of ample fourth tokens, you will always own 1% of all ample fourth tokens,

no matter how many there are, no matter what the rebases do. And it's meant to be a non-correlative asset to crypto, right? It's supposed to be collateral for defy. That doesn't act like the rest of the collateral for defy. So you can check them out at ampleforth.org. You can take part in the Ampleforth liquidity mining by going to geyser.ampilfurt.org and submitting Ample and Eth to the Uniswap pool to get a little bit of extra rewards.

Speaking of Amplforth and this crazy rebase mechanism that drives this thing, we are going to talk about something brand new to the crypto space as of today. And I'm going to share my screen here. And it's called yams. Wait, wait, wait, wait, wait, wait, wait. So like yams as in like the vegetable yam. Jams as in the vegetable apparently. Okay.

And apparently there's an emoji for yams. I didn't realize that. I did not know. I knew there was a zucchini. Yeah. But we have an emoji for yams. Yeah. So yam is this thing, it got released today.

Actually this post went out 10 a.m. August 11th, which for me, that was an hour and 10 minutes ago. And so some people have been teasing this a little bit earlier, there's why we know to cover it. but I've just been reading it and I want to share it now. I'm calling it Yampal because it's very much Ampleforth, but it's an experiment in fair farming, governance, and elasticity. And so take Ample and take the Y-Fi, the Y-Fi,

the yearn distribution mechanism and combine them together. And that's more or less what you get with Yam. All right, hold on for a second. So you said take Ample. I hope people were paying attention when you were talking about Ampleforth as a, as kind of a sponsor for bankless. And you had this great Meet the Nation

where you actually interviewed one of the co-founders of Ample and went in depth on what Ample is. But should we maybe start, David, with a recap of what Ample actually is? Yeah. Because people missed what you just said in the sponsorship slot. You missed the sponsor slot. Yeah.

So Ampleforth goes up and down in price as all tokens do, right? Because when there is a specific number of units out there for a given period, that unit doesn't go, there isn't any more or less of that unit for that one time period. So like Bitcoin or like other assets, the price fluctuates. The only thing that Ampleforth does differently is that it tracks using an Oracle. It tracks the price of the Ampleforth token on secondary markets like Uniswap.

And then it rebases, which means it adds more to the supply or removes from the supply, an appropriate amount to keep that price roughly targeting dollars. So it's not a stable coin. It's just as volatile as Bitcoin, but the unit of accounts, like tracks a dollar over time. And so the Yam token does that too, but it also does some other things as well, right?

And so... Okay, real quick, though, why is that useful, David? So obviously, it's really exciting when, like, we have tokens that are scarce supply because it creates sort of a scarcity game. I don't know this, people hate the word Ponzi, right? But so like there's Ponzi schemes that are ripping you off. And then there's transparent Ponzi's, and I would say Bitcoin is like a transparent

Ponzi game. Everyone's, Bitcoiners in their hearts would admit this to. Everyone is trying to collect their portion of the 21 million Bitcoins. That's the game, right? So this is like a game. It's a scarcity game. But the difference, one difference at least, it doesn't have Bitcoin's longevity, doesn't have all sorts of things, doesn't have its own blockchain, it's all based on Ethereum.

But one of the key differences as well is it's trying to rebase itself as close as possible to a dollar every day. Why is that even useful? Yeah, so the jury is kind of actually still out on why this is useful. My answer for this is that it acts as trustless collateral for defy that you are going to be comfortable paying back in the future, like no matter what, right? So like the market cap of ample fourth could go from something really, really small to really, really big. But if you owe 10 Ampleforth tokens and 10 ampals, like you're only going to be paying back $10 plus or minus a couple percentage fluctuation. It doesn't matter what the market cap of the network did. You always will pay back roughly the same purchasing power in order to pay back your debts.

And so it's a trustless way to denominate debts over the long term. And so this really differentiates itself from dye or a stable coin, especially USC because it's relatively trusted. And then die as people criticize die more and more and more for onboarding centralized assets, Amplforth gets more and more relevant because there's no, die isn't an M0. Dye is an M1, which means it's created by collateral. Ampleforth is itself collateral. That's the main. Yeah, right. Exactly.

And some people would say it's not a good M0 at all. And I totally agree. What makes an M0 good is basically liquidity. The most saleable asset is what makes an M0 good. But there is something to what you said, I think. Again, this is a totally an experiment. But when people define, even economists define what money is, they usually look at three attributes.

But there's actually four attributes. So they always talk about store of value, medium of exchange, and unit of account. But other economists add a fourth, and that's unit of deferred settlement, unit of deferred settlement. So that's like unit of account, but unit of account specific to loans, right?

And the reason the U.S. dollar reigns supreme, basically as the world's reserve currency, is because most debt, most loans, are denominated in U.S. dollars. So this fourth attribute, unit of deferred settlement is actually pretty important. That's the experiment. It seems like Ampleforth is iterating on.

But a lot of people, David, don't like Ampleforth. And I think when you boil it all down, It kind of is because of one thing. It's not that they don't appreciate, like, understand the mechanism of it. I think, at least the smart folks that I've talked to, it's that they don't like the initial distribution of Ampleforth. A large portion of amps were distributed to investors to kind of fund the team, fund the original idea, right?

And that's the aspect that folks don't like. It's not as organic VCs are actually involved. The team has bags, quote, unquote and a lot of people when when you boil it all down seem to be up in arms about that specific aspect of it would you agree yeah they're they're just distrustful of people's who's incentive is to like shield their back and ampleforth is kind of caught in this rock in the hard place where the project is about the token where like things like aave or compound or maker they're not centered around the token they're centered around a product or service whereas

ample force is centered around this token which kind of puts the team in this hard, difficult spot of like, yeah, we're trying to grow our product and service, and our product and service is this token. So that's difficult. Yeah, so I know I derailed you, David, but I wanted to get that out there. So tell us what yams are. Yeah. No, it's good context.

Yeah. So yams are something similar and also something completely different, right? So you can kind of think this as a competitor to ample fourth, but you would also be missing a very large component of what makes yams work. and also Amplforth strictly has in its values that it's a trustless governance minimized system. And Yams are not that. They are welcoming governance. And that's a very key differentiator because trustless M-Zeros need to be without governance.

And this has something else. This has a governance function and something else as well that Ampleport doesn't have. But first of all, the thing they did first is, as I understand it, And again, we're just like kind of learning about this now because it's totally fresh. The first thing they did was they forked Ampleforth. Right. So this is a fork of Ampleforth. Is it not?

Maybe fork is the wrong. Forking means that you're taking that code and then you're changing it and then you're redeploying it. What they're really doing is they're taking the code of Ampleforth and they're taking the code of compounds governance mechanism. And they're taking the, not the code, but like the pattern. of YFI YIFI YIFI distribution, and they're combining that all into one thing, right? And so it's taking a bunch of different features and combining it into this one project.

So they're not forking the code per se. They're more like forking the meme, right? They're more forking the issuance policy and the entire idea here, right? Right. Yes. We're forking ideas more than we are code. Interesting. The Ampleforth code might be an actual fork. But again, if you compare this to Ampleforth, you're missing out on what this really is. Okay, so the Yam token, very much like Amplforth, tracks a dollar, right? So that's the same.

That's very, very much the same. There's a governable treasury for promoting the Yam system, right? And that's very, very different. There's a treasury of funds that aren't denominated in Yams that is governed by the YAM token holders, very much like YFI, very much like YIFI, very much like YIFI. And then also there's this distribution mechanism that incentivizes community members and to take control over yams and have this fair launch, right? Okay. The key difference here is that I'm going to scroll down real quick.

The key difference here is that when a rebase happens for yam, just like a rebase happens in Amplforth, tokens are minted and added to the total supply that's shared throughout everyone, right? So if you own 1,000 yams and then the rebase mechanism mince 10% more, you will have 1,100 yams. The only difference is that when a rebase happens, 10% of the newly issued yams goes to purchasing the Y curve token. And the Y curve token, for those that don't know, is like a very high yielding stable coin asset, right? So the Y curve is the Y die, Y Tether, Y, USDC, YB, USD, all the Y stable coins, which are stable coins submitted to liquidity in the curve protocol. When you combine all those together, they create the Y curve token. So Y curve is like a super stable.

It's like a meta stable coin, right? Y curve itself. Meta meta stable coin. Meta meta. Okay, so Y curve, the token itself is like a stable coin that, A portion is die, a portion is BUSD, a portion is USDC, all the other popular civil coins on Ethereum. And does Y-Curve as well entitle you to Curves transaction fees?

Yes. And so why die receives, this is really stretching my capacity of understanding these systems. Why die receives yield from people using Curve and die, right? And so does Y-Tether, so does Y-U-S-D-C. and then when you combine all of those together, you get Y, CRV, right? Okay. But it's going to track the dollar. It's just like a super meta-stable coin that's kind of almost diversified its risk across

multiple, you know, stable coin, but also adds the risk of curve. Right, exactly. And then there's also yield, right? And so it's purchasing, so when 10% of the rebase for yams happens, 10% goes to purchasing Y curve and adds that to the treasury. So what's happening is a little. bit of money printer, money printer's going on, where they're printing money to purchase other money to add it to the treasury, which the YAM token governs over, right? Okay. So that's kind of the big

value prop of YAM is that over time, the treasury of YAM gets larger because of the rebase. And the rebase, right? So this is how Ampleforth basically works the same, a similar way, is there's a rebase. So what will happen. is when lots of people are bullish on ampals, just in general, for whatever reason, then ampals float above a dollar. So they'll start trading at $2 or they'll start trading at $3. I've even seen it close to $4 trading. And then what happens is more supply is printed essentially during that rebase in an attempt algorithmically to drop the price of ampers closer to $1. So that's how it's pegging. This works the same way, except that a portion of that,

rebase on the upside. So say yams were trading at $3, for instance, 10% of the rebase amount would be taken and parked into a, you know, a governance fund, a treasury of some sorts. Okay. All treasury, yeah. And that that treasury would essentially be sort of the, almost like the base utility value that's backing all of the yams in existence. Is that right? Right. Right. So it kind of turns the Y curve as like the deposits of the system and then the YAM as the credit of the system. And you can buy the Yams on the secondary market as credits to access the deposits of the Y curve. Right.

And so now we have to get into the distribution, right? So there's eight different pools of yams that will send out YAMs to those that supply the tokens to them. And so we can go to the Yam website, right? And so this is what you'll see when you go to the Yam website. Depending on what tribe you consider yourself, if you're like a link marine, if you're a Spartan, if you're a maker, whatever. I like how they turn every single one of these is an emoji of sorts. And so you can take your asset of choice and deposit it.

And that deposits it into the quote unquote farm for that particular Yam. And this is just a distribution mechanism. Your assets aren't doing anything in here. They're just being there. No one is on the other side of this. This is just proof of a locked up capital so that you can receive the Yam token, right? It's not at risk, except for the fact that it's out of your wallet. It's not at risk because it's not being borrowed against nothing's happening.

You're just locking up capital, right? And to be clear, David, none of the Yam initial supply was awarded to a team pre-mined. venture capital funded, none of it, right? Well, yeah, let's go to the ether scan page and we can see where all the YAM tokens are, right? And so with the holders, there are eight addresses, each holding a quarter million YAM tokens. And then there's one, two, three, four, five, six, seven, eight pools for depositing assets to get the YAM token. So we can assume that these eight pools, each with a little bit over seven percent of the supply,

correlates to one of these pools that we see on the YAM website. By the way, this goes live in 30 minutes from this time of recording. So by the time viewers are watching this, this is already live. Just live for the first day, right? But this says 3.5 million. And I thought there's 5 million. Yeah. So on this, on the medium page, which is like the announcement, it says there's

two million distributed 250,000 yam per pool over seven days. launching in 30 minutes. But there is a total supply of $5 million. Yeah. I don't know where that comes. I don't know where those are. I don't know. Well, is that a pre-mine?

I don't know. Anybody getting the $2 million? I don't know. We should find that out. Yeah. But they actually don't, according to ether scan, they don't exist. So are they deciding to award those later?

I don't know. That's interesting. So here's one thing that is happening. in another pool, I think somebody has, there must be a multi-sig that controls the yam printing, the yam minting, but it sounds like in, after this phase is done,

there's going to be a second phase where three million more yam get distributed through the y-curve uniswap v2 liquidity, right? So yam is supposed to track a dollar, and so it's going to be paired against y-curve to give yam the liquidity. This is like the ample fourth. Kaiser program. Yeah, I got it. Yeah, so there's going to be liquidity incentives for depositing Y curve and YAM tokens into Uniswap. So it feels like phase one is they're trying to seed some

distribution, almost in a YFI type way. If people are familiar with YFI, like go listen to our Andre podcast came out this week, like get familiar with that. And then so they're distributing not to VCs and that kind of investors and that sort of thing. They're distributed to liquidity providers. And then phase too is they're trying to incentivize liquidity. And by the way, incentivizing liquidity has been incredibly, it's worked really well for Ampleforth. Like they were, you know, number two, something like that? Number one.

Number one. By a long shot. On uniswap. On uniswap, right. Okay. And so liquidity incentivization does work and has seemed to work with uniswap. So this is like the playbook almost, but with a different distribution. We need to find out where that other, like the 3.5 million, right?

We've got 3.5 million tokens. This is 5 million. I'm wondering about where's that other 1.5. Yeah, wait. So 2 million into the pools. Yeah. 250,000 yam per pool. Yeah.

And so, you know, here's it. Here they are. But yeah, so this is weird. So when you add up eight times 250, you get to, oh man, quick math. you get to 2 million, but there's 350 million yams here. So there's some unaccounted for that hasn't popped up on ether scan yet.

And that's just a mechanism of a specific contract in ERC20 tokens that sometimes people don't include for whatever reason. Are we sure they're not like doing anything else? They're not printing some for their, I don't know. Well, so this is, this is, according to this post, they are very specifically trying to make a non-VC

printed token, right? So they're trying to do they say explicitly anywhere that the YM team doesn't get anything and no one gets anything aside from these liquidity? Yeah, I don't think there is a YAM team, right? There's just the people that made this thing. I don't think they would call themselves the team, right? And so a fair distribution mechanism that incentivizes key community members to actively take the reins of governance.

I guess that doesn't, you know. No one is saying in this post explicitly that aside from these, you know, liquidity mechanisms, no one else is getting it. Well, it does say that. Yeah, right here. Right here. All right. Well, the post says it. Yeah, I'm sure. distributed in the spirit of YFI. No premium, no founder shares, no VC interest. Simple, equal opportunity staking distribution to attract a broad and vision-delined community to steward the future of the protocol. All right. So I'm assuming that's true. And assuming that is true. I don't know Brock, Trent, or Clinton, but I do know Dan. I do know Will. And I like those guys.

I'll leave it at that. So if we were to kind of summarize the difference here, the difference it seems to me, make sure I capture this between Ampleforth and Yams are obviously length of time alive, but one is yams has a reserve, they set aside. Ampleforth has no reserve. So basically there's no underlying value

besides the value of Ampleforths. Ampleforth is the reserve, right? amps are the reserve, right? And so this has a 10% or so it's going to set aside in some sort of a treasury. And you would assume that the market would value, like, that the price of YMs would not drop below the value of that treasury. You know, you might make that assumption because it's sort of it's a treasury that backs the value of Yams, right? And so that's one difference. There's some base backing reserve, almost like central banks have, like, you know, a reserve of other assets like gold and that sort of thing.

And the second difference is governance, right? Huge difference. That's a huge difference. Okay, so governance is Yam token holders. They get to vote on what can be done with that treasury. And they vote on other aspects of governing the protocol in the similar way of YFI, whereas Ampleforth is a bit more governance minimizing, wouldn't you say? Right.

Right. And I don't even think that it's right to compare these things because they're achieving totally separate goals. they have similar mechanisms, but they have totally different like success, success scenarios, right? And so like Yam is really a hybrid platypus between Yiffy and Yerne and Ampleforth, right? But they're not competitors. Like I would maybe even say that Yom and Yiffy are more competitors than YAM and.

Wait, you think so? So it seems to me what YAM is trying to do is compete as a base money, zero. and M0, just like Ample 4th, whereas Yiffy is trying to, it's a capital asset, right? Yes, yes. I think that is a decent. It's the value of VM, there's no fees associated with it. What do you mean? Oh, did you hear me what I said?

So, yeah, so I think that, I think we were, we got like a little disconnected there for a second. So I think that it seems to me that Ample is competing in the same way. that EMs are as an M-Zero because like there's no underlying transaction fees. Like with YIFI, there's Wi-Fi. We keep saying Y-FI, WIFI, that's my bad. So with Wi-Fi, there is like the transaction fees from the protocol ultimately, you know, it's kind of a cash flow. This has no cash flows. Aside from the reserve, it's set aside as that 10% reserve, but everything above that 10% reserve of the value of Y-curve tokens, that's all like monetary premium territory, right? When you say? Yeah, yeah. So it's a little bit of both. Okay. It splits, it really actually does split

wiren, yearn, yiffy, wiffy, wify, wify, whatever. It really splits that and Ampleforth right down the middle and constructs its own thing. So I think when you say that you think that you think that YAM competes with Amplforth, I think that that will be up to the YAM token holders as to how they perceive YAM's role in Ethereum because, you know, these four, these five, they're calling themselves the horticulturist, horticulturalists, Brock, Trent, Clinton, Dan, Will. They are spinning up this system, but they don't own the system. Yeah. The whole idea is that day one is in the hands of the community. So the community will decide, like, what, what role does the YAM token fulfill in Ethereum? No one else. That's interesting. So, but it is a double-edged sword to add governance

Right. So like with ample, no amount of ample, the token at least, entitles you to govern the system. Correct. And people would say, look, it's still centralized because there's a central team. Absolutely. Understand, right? You can change the code, that sort of thing. But with this, governance of token holders, like, they can vote. Like, so 51% of YAM token holders could say, we want to print all future supply of YAM directly to, like, this specific set of. addresses, right? Whereas in Ampleforth, there's no protocol mechanism for governance to do that, right? Nope. That's a double-edged sword, though, because that could be bad for a base money system. Yep. Yep. Base money system and governance are kind of like oil and water. But again, we will see what happens. The cool thing about this is the YFI distribution, I think. Yes. Yes. And this is also yield farming for

beginners because all you do is like you probably if you're listening to this you probably have one of these assets right you probably have ave or link or synthetics or maker or comp or yfi you probably oh at the very least you have w eth you have wrapped ether you have something here and all you have to do is you deposit it that's that's all you do and this is the point where we say um don't deposit anything that you're not willing to lose right because let's suppose it's the post is that's that's There's no audits. No audits. No audits.

No audits. None. While the initial creators of the Yam protocol have made reasonable efforts to attempt to ensure the security of the contracts, including forking much of the code base from existing well-audited projects and soliciting review from friends,

nothing approaching the rigor of a formal audit has been conducted at this time. We strongly urge the caution to anyone who chooses to engage with these contracts and think a proper professional audit would be highly advisable if the project gets any. meaningful use. This was a 10-day project from start to launch. They started this 10 days ago.

This is completely like right out the gate. So this is this is your own risk. This is Andre's I test in prod. Yep. This is what's happened here. They're testing in prod. This whole thing could get hacked in a in a heartbeat in a second. In fact, as soon as it received some attention, you can bet there are some smart people looking at how they can exploit the vulnerabilities of this thing, right? So if you choose to do this, and we don't recommend that anyone, this is not financial advice, we don't recommend anyone chooses to use these defy protocols. But this is like on the spectrum of risk, this is like code red, super risky, you know, you could lose anything you put into this thing. Yeah, if you guys watched my settlement assurances in the protocol sync thesis talk at Ethereum,

I talked about the time value locked metric for valuating defy protocols. So like MakerDAO has a really high time value locked. It's had a lot of value locked in its contracts for a lot of time. This has had $0 locked for zero seconds. It is literally the worst time locked value score you could have. Plus unaudited. Plus on audit, unaudited.

So the only way that you get time value locked is more value flows into the contract. So it's kind of like a chicken and egg debate. But when it comes to Lindy, this has zero. zero lindy yeah i don't know how much more we can say about how risky this is it's just super freaking risky i mean i did i had a tweet last week or i just i feel like some people aren't appreciating the risks of defy david like it's just like or they aren't appreciating that other people are talking about the risk of defy this whole place the whole defy bankless thing we talk about like that should be wrapped in police caution tape like do not cross unless you know

look, a chunk of a building could fall on your head and wipe you out, right? Like, this is like dangerous stuff. Defi is not safe. So keep that into context. Other things are safer than others, but like some things are safer than others. But if you're entering all of this stuff, none of it is risk-free. All of it's risky. You could lose everything.

This is the most extreme, like one of the most extreme sorts of things that we see. It does not appear to be a scam, right? Does not appear to be a scam. These are some legitimate names, but that doesn't mean, you know, that doesn't mean, you know, that doesn't mean much in terms of the risk. It means a little bit, I guess. But very risky. Anyway, anything else?

Nothing for me. Nothing about yams. YAMPell. We're calling it yample. It's a yample. It's yample now. Stacking yams. All right.

What else should we talk about, my friend? What else is happening? To Dexas, huh? Dexas. Okay. Dexas are blown up, right? In a good way. Yes.

In the way that we like. Like in a good way, right? It's finally hitting product market fit. I'm going to pull up a tweet from Hayden about Dex volume. Well, you may be intro us to what's happening in the Dex world because it's getting really excited. Yeah, so this is one of those metrics that really indicates that all of the action is happening inside of DeFi, right?

And the epicenter right now is Uniswap. And we know this because Unis, for tokens, newly issued tokens, are getting listed on Uniswap first before any other exchange. Finance just listed YFI, Yiffy token yesterday, a full two weeks after it's Genesis. So like still pretty fast, but also two weeks behind Uniswop because Uniswap is permissionless. Like Uniswap didn't need to wait for Andre to whitelist it on Uniswap.

That's not how it works. Still yet to be on Coinbase. And so like the epicenter of this whole boom that's going on in is Unitswap, right? Like all the volume is on uniswap. It's dwarfing centralized exchanges. I don't know off the top of my head how much volume there is on a coin base exchange on a daily or weekly or monthly basis. But I bet you if you'd be, sorry, comparison of various centralized exchanges and then you would have Uniswap be up there in those numbers. Look at this.

Seven day volume. If you extrapolate that, $34 billion in volume and annualized. that's insane i mean that's a very large exchange at this point i mean that is that has got to be um eking up to even you know the crackens of the world let's say that tier of exchange yep yeah yeah i'm trying to find a tweet real quick so i can send it to you but uh basically it is uh yeah here i'm gonna i'm gonna send this to you uh ryan in uh zoom uh notes so you can display this one This one just came out today. If Uniswap was an L1 blockchain, it would be third.

In fees. I'm pulling it up. In fees. And this was actually a little bit late. There was an earlier image that showed like Uniswap was at like 0.7 million. Holy crap. 0.7 million in one day fees and Bitcoin was at like 0.9. So like Uniswap is almost as big as Bitcoin in how many fees it's the volume of

What fees are these? Are these gas fees? No, exchange fees. Not gas fees. Exchange fees. Right. And so this is the 3.3% on every single Uniswap trade. That is what this is talking about, right? So just Uniswap is taking a comparable amount of fees as the entire Bitcoin blockchain. And we said taking, but the interesting thing about Uniswap is they are, these fees are going directly to liquidity providers. Mm-hmm. Right. So it's not going to the Uniswop team. It's not going anywhere. It's going to a nebulous set of liquidity providers, whoever they are. This is an liquidity incentivization mechanism. Now, something else that have been, you know, watching with Uniswap is just last week they announced 11 million in funding, which is interesting, right? And I wonder how that, like, they've been a funded team before. They were obviously, you know, the story of Uniswap is Hayden, who developed it, received like $100,000 something grant from the Ethereum Foundation, built the whole thing. His first programming project launched it. And, you know, it was pretty popular from day one. But now they're starting to get funding, which leads me to wonder as to what they're actually going to do. Like, is a token going to be next, right?

Are they going to go the way of comp or balancer, which we see and create sort of a capital. capital asset out of these fees and will a portion of those that capital asset be like rewarded or awarded to VCs which is interesting what do you think about that yeah while I talk about what I think about that going ahead and go to that link that I just sent you because that would be fun too so for every fully governance minimize governance reduced protocol like uniswap for every protocol that is entirely trustless entirely like hands off there is also the governable hands-on version of that, right? So balancer has both of these, right?

The cool thing about balancer is it launched with both of these at once, where you can have your own native balancer pool that doesn't answer to the balancer token, or you can. And so Uniswap is the non-governance application, and there's probably a version of Uniswap that can be governed that would then justify the Uniswap token. And so that is perhaps my idea as to what's going on. We will see.

That graphic is so cool. All right. It's called this Pac-Man. Yeah. Yeah. So this is a graphic of all the transactions going on over a specific period or active addresses that have that are really like heavy defy users, right? These are the users.

And each of these, by the way, each of these users, some people think they're individuals. We've talked about before on Bankless State of the Nation, David. that it's not so much. Don't think of that as one-to-one mapping of individuals. It's one-to-one mapping to a bank account. And Ethereum addresses like a bank account. And a bank account is a capital pool that can represent one individual or many individuals

could represent hundreds of thousands of individuals, right? Right. Anyway. Yeah. And this graphic just shows exactly how, where Uniswap is in relation to the rest of the defy ecosystem, which is at the epicenter, right? So there's all this economic activity between, you know,

synthetics, Kyber, DDX, you know, bank or auger, compound maker. But then there's uniswap that is like basically connected to everything. So like whenever there's a transaction going on on compound or auger or something, it's always seemingly one transaction away from uniswap, right? So like no matter whatever people are doing, they're going through uniswap to go through other protocols. And so uniswap is just like this,

this volume Pac-Man that's just munching on all the liquidity in the space. in a good way. What is? Oh, okay, so all that red in the center, that's usage accounts, eth addresses that are shared by three or more protocols. So there's a whole bunch of accounts. It looks like that are just using uniswap.

That's what that means if it's just on its own. So if it's yellow, then it means it's being shared by one or more protocols, but all of this kind of pink color, uniswap color, some people are just, going into defy just to use uniswap, it looks like. Yeah, like one way to view this, all these pink dots, all these, these are all Ethereum accounts that are just using uniswap, and there's a lot of them.

There's more than than there's ever been before. To me, this is a bunch of new entrants into defy. Because uniswap is the easiest protocol to use. The UI is super elegant, and it's the place where you go to buy all these defy tokens that are moaning. And so this massive array of, of pink dots that are people who are just using one protocol are the new entrances into defy and eventually over time I predict that they will migrate into becoming yellow and then also

orange red dots which are you know turning into defy super users right they're using multiple protocols but right now uniswap is like the first stop and that's why there's so many just a story just you know evidence of this empirically I had a text from a friend a couple weeks ago he said he's just a coin base user and he's like hey I want to do some stuff with defy tokens and he listed a few that he's interested in and he's like how do I do it and I said you can't get those in Coinbase right so we traded a text message back and forth and he was motivated because of the speculation of defy tokens and he'd never been motivated before but within 45 minutes he you know set up a MetaMask account had his first Uniswop transaction completed and was one of those pink dots basically

it's it's difficult but at this point in time it's not that difficult i mean two or three years ago like none of these dots existed there was maybe maker right there was maker on this just maker um very far left is very far left yeah it's just maker and all of these dots are just that's in the past you know year and a half two years right mm-hmm mm-hmm crazy crazy stuff yep um it looks like we are moving forward pretty fast, maybe at an accelerated pace. Should we wrap up with this? I think that's it. That is the state of the nation. All right. State of the nation today. Action items, we will include a few in the show notes. One, of course, is to verify eat supply yourself. We talked about that at first. Don't trust what you read necessarily on Twitter. Dig a little deeper. I think bank listeners

generally do. We'll include some links to yam and yam farming. again, appreciate the risks before you do anything with that, but it is another fascinating monetary experiment. And lastly, we'll include some links to check out some of the Dex usage as well. So you can see how that is growing too. Guys, none of this was financial advice. ETH, Bitcoin, all the DFI protocols we always discuss are very risky. You could lose what you put in. This has been Bankless State of the Nation, Episode 9.

Thanks a lot.