YAM token’s market cap collapses by more than 90% within minutes as a flaw gets uncovered

The viral DeFi project Yam.Finance's YAM token has lost more than 90% of its market capitalization within a few minutes as a "potential flaw" gets uncovered.
"We are urgently investigating a potential flaw...We strongly advise exiting the Uniswap YAM/yCRV pool prior to rebase at 8am UTC (35 mins)," Yam.Finance tweeted today. yCRV is a basket of yield-generating stablecoins on the Curve protocol.
The market capitalization of YAM has plunged to just about $19.5 million at the time of writing from $475 million about one hour ago. The price of YAM is currently trading at about $0.6 apiece.
"I'm sorry everyone. i've failed. thank you for the insane support today. i'm sick with grief," tweeted Brock Elmore, a creator of the Yam protocol.
Similar to Ampleforth protocol's AMPL token, Yam protocol's YAM token is price elastic, meaning its supply is adjusted based on price movement. When its price is above $1, the token's supply is increased until the desired price equilibrium of $1 is reached. If the price of goes below $1, the supply is decreased until the price parity has been restored. Accordingly, the market capitalization of such tokens fluctuates sharply based on their prices. © 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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