What happened
Yam Finance's rebasing logic minted excessive YAM into reserves because of a scaling error. The excess supply made governance unusable, preventing the community from fixing the original contracts through a rescue proposal.
Technical root cause
The rebase calculation omitted division by BASE after multiplying initSupply by yamsScalingFactor. Excess reserve minting also broke governance because its voting requirements depended on supply. This was a protocol failure rather than an external attacker draining funds.
How it happened
- The rebase calculated total supply using a scaling factor but omitted the corresponding division.
- The incorrect supply calculation caused excessive reserve minting.
- Governance requirements depended on token supply, so the inflated supply undermined the community's ability to approve changes.
- A rescue proposal was submitted but could not restore governance. The project planned a migration to a new version.
Protocol details
Classification
Token
Protocol Type
Exploit/Other
Affected asset / contract
YAM
Protocol links
Website
@YamFinance
Evidence
Build your security review skills
Work through hands-on labs covering real exploit mechanics, review techniques, and defensive patterns.
