Harvest Finance is a system that automatically farms the highest yield possible using the most recent DeFi protocols and optimizes the yields obtained using the most advanced farming techniques. Harvest’s governance token is FARM. It is asserted that FARM holders can vote on proposals for the FARM operational treasury and receive a 5% fee from Harvest operations. Compared to manual labor, the Harvest platform consolidates the most advantageous yield opportunities to assist its users in generating a more significant yield through automation.

What is Harvest Finance (FARM)?

Harvest, formerly known as Harvest Finance, is a decentralized finance (DeFi) platform that utilizes blockchain smart contract technology to automate yield harvesting. Harvest (FARM) is a yield aggregator that operates across multiple chains. This sophisticated protocol simplifies DeFi (decentralized finance) investing by streamlining the core processes for yield producers. The network comprises a user cooperative that aggregates resources across a decentralized network. This network utilizes multi-chain smart contracts to direct user funds to the pools with the highest APYs.

Harvest publishes smart contracts on the public blockchain, including pre-programmed yield farming strategies. Users can deposit assets into the contracts, and the automated strategies will yield farms on their behalf at various third-party protocols. The Harvest strategy will periodically trade any accumulated rewards through automated compounding mechanisms to increase the user’s token quantity, potentially increasing their exposure to future rewards.

The platform is intended to help users, who are frequently referred to as “farmers,” optimize their returns by autonomously allocating their assets to the most lucrative opportunities in the DeFi sector. Harvest provides a platform that is both potent and user-friendly, enabling users to identify yield strategies throughout the decentralized finance ecosystem and to monitor critical performance metrics.

Background of Harvest Finance

Bread, an anonymous originator, established Harvest Finance on September 1, 2020. The project was published to optimize returns for yield farmers by automatically allocating capital to DeFi protocols that offer the highest returns. To incentivize produce farmers who utilize the Harvest platform (previously known as Harvest Finance), the $FARM token was introduced. The token was introduced without presale, pre-mining, venture capitalist, or investor funds and had no circulating supply at launch. Tokens were never sold during an ICO, TGE, or other fundraising endeavor. Harvest has a token with the ticker symbol $FARM, with a market capitalization of $29,118,033 and a supply of 687,036 FARM. The token is scheduled to be distributed for four years from its introduction.

Harvest Finance was exploited for $24 million in October 2020 due to an arbitrage transaction that manipulated the price of stablecoins held in the protocol’s votes. Harvest Finance’s total value locked decreased from just over $1 billion to $290 million, and FARM experienced a 65% decline in an hour. Its TVL (value of assets presently being staked in the protocol) decreased further to $109 million in June 2022 and is currently valued at $15,221,321.

Features of Harvest Finance

• More than 100 yield strategies are available for ETH, WBTC, USDC, USDT, and other cryptocurrencies on the Ethereum Mainnet, Arbitrum, Base, Polygon, and zkSync Era.
• Historical and Current Yield Performance Indicators
• A history pane that accurately monitors the net changes in the underlying token and USD terms
• “One-Click” farming solutions that utilize any token in the user’s wallet
• The Next-Gen Dashboard displays all the user’s performance strategies in a single view.
• The current USD valuations of input and output tokens
• Shared with insightCharts for the price, TVL, and APY
• Historical breakdown of annual percentage yield (365 days, 180 days, 30 days, and 7 days)

Benefits of Harvest Finance

Using Harvest Finance provides numerous advantages. Firstly, it streamlines the process of investing in DeFi. Users are not required to study various yield cultivation strategies. Instead, users fund their accounts, and the platform handles most of the work.

Enhances Return on Investment

Harvest Finance’s approach assists investors in optimizing their returns. The protocol can achieve this objective by pooling users’ funds to obtain the most favorable rates and fees. As the network expands, it will be able to secure even more advantages.

Shared Fees

DEX and farming fees are recirculated by the developers throughout the community. These expenses are allocated to buybacks and rewards for stakeholders involved in the profit-sharing pools. It is also possible for the community to authorize network expenditures through the governance mechanism.

Strategies for Reinvestment

Creating a wealth generation cycle is one of the most significant advantages that Harvest Finance offers. The network incorporates an auto-compounding system that automatically re-stakes your rewards. The procedure is straightforward because your rewards are issued using FARM tokens.

Transparency

The development team has demonstrated high transparency, which is unique to the platform. The team elected to distribute tokens every week to ensure that all users had an equal opportunity.

How Does Harvest Finance Work?

Harvest Finance employs diverse protocols to establish a user-friendly DeFi alternative. The system integrates liquidity mining, P2P lending, autofarming vaults, and other components. These elements generate a user-centric, decentralized, immersive, low-risk experience.

FARM, the Harvest fee-sharing and governance token, enables holders to propose and vote on protocol modifications. Additionally, users can deposit FARM tokens in an auto-compounding vault to earn performance fees from other vaults administered by Harvest Finance. FARM is a flexible asset that can be traded, cultivated, or staked to generate rewards. It is important to note that FARM is an Ethereum token compatible with ERC-20.

Harvest Finance introduced a system known as fCASH, which enables users to access funding by using FARM tokens as collateral. The network’s stablecoin, fCASH, is what the system uses to reimburse debtors. These tokens can be exchanged for other stablecoins, including USDC and USDT. The borrower can transfer these funds to renowned CEXs and withdraw them as fiat if desired. This method eliminates the gatekeepers from the lending scenario.

Key Innovations of Harvest Finance

Communal Harvesting and iFARM

The communal sharing of protocol fees through open market FARM buy-backs is one of Harvest’s most significant innovations. The Communal Harvest Pool is a staking pool modified to match the SNX. $FARM is distributed pro rata to all those staked in the communal harvest pool over a duration of 1 day after being purchased on the open market. The duration of the payout is reset with each new reward introduced. Consequently, the pool’s instantaneous incentive rate fluctuates throughout the day. A 7-day average of the reward rate is therefore displayed for this cohort. The smart contract can be directly read to determine the instantaneous rate.

iFARM is a receipt token for FARM that is auto-compounding in the Communal Harvest pool. It is available on the open market or by staking FARM in the iFARM pool on the Ethereum mainnet or Arbitrum network. iFARM employs the same vault architecture as Harvest’s other vaults, gathering FARM from users and aggregating it into the Communal Harvest pool.

Harvest Smart Contracts

The Harvest smart contracts are an automated yield-farming solution that depends on third-party products and applications to provide yield sources and their corresponding reward rates. Furthermore, Harvest can increase the APY% of a specific fund by incorporating $FARM reward emissions into the overall earnings. Each pool specifies the distribution of rewards, and weekly FARM emissions are disclosed.

Vaults

A vault is a scaling solution for Ethereum smart contracts that enables users to convert tokens to and from a pool. Harvest generates yields to share by integrating the tokens from the vault into a third-party underlying protocol. When a user converts tokens to participate in a vault, the tokens will be exchanged for the underlying token required by the vault whenever necessary. The user will be issued a share of the vault, represented by a fToken. The total number of tokens in the vault is updated whenever a deployed strategy trades rewards to generate additional tokens. However, the number of existing fToken shares remains constant. A ‘timelock’ safeguards the investment strategy from modifications.

Timelock

Timelocks are a security feature in Ethereum contracts frequently cited to safeguard users from changes they do not concur with. The timelock allows users with a particular amount of time (currently 12 hours) to review the new contract and revert funds if they want to opt-out. The deployer can approve or reject the strategy change at any point after the specified period has elapsed. On September 15, 2020, the harvest community chose the current 12-hour duration of timelocks as a compromise between the risks and benefits of timelocks through a farmer’s market discord poll.

Strategies

Strategies are a critical element of the Harvest apparatus, as they establish how vault funds can be employed with third-party protocols to produce yield. The ‘timelock’ mechanism is how strategies are linked to a vault. Initially, the change is declared, and a period (currently 12 hours) must elapse before the change is officially implemented and the new strategy can access funds.

Harvest Hacking Incident

Harvest Finance’s combination of features and usability resulted in significant adoption at its inception. On October 26, 2020, an unknown attacker seized approximately USDT and USDC of roughly $24 million USDT from the Harvest Finance pool, resulting in a significant network hack. These heists significantly impacted the market value of FARM, as the token experienced a 60% decline immediately following the news. Additionally, the quantity of money locked in the protocol decreased by 70%, from $1 billion to $296 million.

The hacker repeatedly manipulated the prices of one money lego (curvey pool) to deplete another money lego [farm USDT (fUSDT), farm USDC (fUSDC)]. The perpetrator converted the funds to renBTC and exited the system by converting them back to bitcoin. Other funds were combined using Tornado Cash, an Ethereum obfuscation software. Investors appear to have withdrawn approximately $350 million from the site after the attack.

Subsequently, the perpetrator returned approximately $2.5 million to the deployer in the form of Tether and USD Coin, which were then distributed to the affected depositors on a pro-rata basis using a snapshot.

What is the FARM Token?

The total supply of FARM is 690,420 FARM. The tokens will be disseminated four years after their launch on August 29, 2020. It distributed 23,555 FARM each week after its initial four weeks. The lending syndicate utilizes FARM as collateral. Lenders can deposit FARM tokens into the pool and earn interest on their deposits. Borrowers may utilize FARM as collateral to obtain additional assets from the pool.

The FARM token is distributed among three distinct categories. 70% of the funds will be allocated to liquidity providers, 10% will be allocated for operational treasury to cover the costs of protocol maintenance, and 20% will be allocated to the Harvest Finance team.

Governance

The Harvest Finance platform utilizes the FARM token as a governance token. FARM is employed to stake and vote on proposals to establish the protocol’s course. The number of FARM users significantly influences the protocol’s decisions with a stake. The Harvest protocol has shifted from formal voting to achieving consensus through contributor proposals and discussion. Holders of the FARM token are not granted the ability to vote on the distribution of incentives, the deployment or updating of strategies, or the addition or removal of vaults. Voting is employed to make more complex strategic decisions.

Harvest Token (FARM) Supply

In Week 5, FARM holders overwhelmingly voted to limit the maximum supply to 690,420 tokens by reducing the emission of tokens by 4.45% each week until week 208 (August 27, 2024), which is exactly four years from the launch. Consequently, token emissions are currently scheduled to adhere to the following curve:

How do I buy FARM Tokens?

• Go to Gate.io Exchange and create an account by entering your email ID and password.
• Set up your fund password by entering settings; this password will be asked during fund withdrawal.
• To buy FARM tokens, you must complete KYC with the proper documents.
• After KYC, go to Spot Trade, search for FARM, and select.
• After opening the new page, fill in the amount in FARM or USDT you want to buy and click the buy button.
• After a successful buy, go to the Wallet > Withdraw page.
• Here, select FARM, and then enter the wallet address.
• It will ask you for your fund password, 2FA, and email code; enter them correctly and submit.
• Your FARM will arrive in your wallet after a few confirmations.

Conclusion

Harvest Finance represents a substantial advancement in the DeFi sector, providing a community-driven, automated platform that enables users to optimize their yield farming activities. Harvest Finance is increasing the accessibility of high-yield agricultural opportunities to a broader audience by leveraging blockchain technology and prioritizing accessibility and governance.