Not so long ago, I described these four luxurious strategies that Harvest Finance recently integrated into their platform. Well, it seems that Harvest Finance is back and, this time, they are firing new farming strategies out like a machine gun.
This time it’s a lot of new strategies, and it can be quite an overwhelming amount that I feel needs a deeper examination to help myself, and hopefully, you guys also!
Here are the new Farming Strategies that they implemented very recently;
Source: Harvest Finance
To make things easier, I’ve broken them down and grouped them up to provide you detailed explanations of what’s going on.
The first group of strategies is using the Basis Gold assets alongside the stablecoin DAI. They are DAI-BSG and DAI-BSGS.
The APY for the DAI-BSGS strategy is above 1000%, which the highest compared to others on this list. The DAI-BSG is around 300% APY, which is also relatively high.
Basis Gold is an algorithmic synthetic gold asset created by BUILD Finance. It seems to belong to the same family as Basis Cash, which was covered in the previous Harvest Finance yield strategies piece I wrote.
The entire Basis Cold protocol runs through four different tokens;
- BSG - A coin that targets the price of Gold
- BSGS - Used to help BSG target the price of Gold.
- BSGB - Bonds that are bought by burning BSG to buy at a discount when the BSG price is below the target.
- BUILD - A governance token
When the price of BSG is beneath Gold’s price, the protocol will allow BSG to be burnt to buy BSG at a discount. These bonds can be redeemed for BSG on a 1:1 basis once the price of BSG has returned back to the target.
When the price of BSG is above the price of Gold, the protocol mints BSG, which are first redeemed by the BSGB holders, any further expansion will be distributed to BSGS holders.
With this system in place, these three tokens help BSG remain as close to the price as Gold as possible. The protocol measures BSG by a commentary of the UNiswap Time-weighted average price and the XAU/USD oracle rate from Chainlink.
The Group 2 farming strategy involves the Basis Cash (BAC) token. This was covered in my previous post for Farming Strategies, but that strategy centered around the BAC-DAI pool.
The APY for this pool is just around 20%, which is relatively low compared to other Harvest Finance strategies.
To find out more information about Basis Cash and how it works, please refer back to the previous article. It works similarly to the BSG token described above. However, instead of tracking Gold’s price, BAC is designed to be as close to $1 as possible using Basis Shares (BAS) and Basis Bonds (BOND).
With this new strategy on Harvest Finance, users can now simply deposit BAC into the protocol rather than deposit liquidity into the BAC-DAI pool on Uniswap first.
Group 3 utilizes the Empty Set Dollar (ESD) token and requires users to deposit this single token to take part in the farming strategy.
The APY for this strategy is just around 5%, which is low compared to other strategies available. It looks like the more funds that are locked into a specific strategy, the lower the APY BUT don't take it for granted, as oftentimes strategies with millions of deposits can yield high APY if something is going on the market.
This strategy already has over $3 million in deposits.
ESD is another elastic supply algorithmic stablecoin that focuses on remaining stable at 1 USDC, composable to be integrated into all DeFi Infrastructure, and totally decentralized.
When the price of ESD is above 1 USDC, the new ESD is minted by the protocol. The newly minted ESD are distributed to those that have bonded their ESD in the DAO or provided liquidity to the ESD pools on Uniswap. The intention is to create sell pressure to push ESD back toward 1 USDC.
If ESD is trading beneath 1 USDC, users have the option to buy “Coupons” by burning ESD. These Coupons are priced at a discount relative to ESD and represent a claim on future ESD minted.
The great thing about ESD is that it uses a time-weighted average price over an 8 hour period to make it expensive for attackers to exploit the system through flash loans.
Group 4 involves Dynamic Set Dollar (DSD), and this is the only coin required to participate in this strategy.
The SPY yielded from this strategy is very low, around 1%.
DSD is yet another elastic supply algorithmic stablecoin, which builds on top of the ESD model and tries to improve it.
If DSD is trading beneath $1, the DAO issues Coupons as debt. Like in ESD, users have to burn DSD to purchase these Coupons - contracting the supply of DSD. The Coupons can be purchased with an added discount depending on the debt ratio (Debt/Circulating Supply) in the system. The debt ratio is capped at 35%, implying a max premium of around 46%.
On the other side, if DSD is above $1, the DAO mints new DSD which is equal to the number of Coupons redeemable. If any additional DSD remains after all Coupons have been redeemed, the bonded DSD holders and LPs will be rewarded.
Group 5 involves strategies within the Curve.fi pools. Two of them are for stablecoin options in EURS and UST. The other is for a synthetic Ethereum option.
The APY for this group is respectably high as it ranges from 40% to 86%. The CRV:SETH pool already has over $14.6 million, so its APY is lower.
To Farm on CRV:EURS, users will have to deposit the EURS into Curve.fi. The same goes with CRV:UST and CRV:SETH. After depositing, the user can then come back to the Harvest Finance page and then stake their CRV assets received.
The UST token is built on the Terra Protocol. It was first launched on Bittrex Global and is intended to be a multi-chain stablecoin that will begin on the Ethereum and Solana blockchains. It is another algorithmic stablecoin that can only be minted through the reserve asset, $LUNA, which needs to be burned.
Lastly, the SETH token is a synthetic version of Etheruem created through the Synthetix Protocol.
Group 6 all involve the Mirror Protocol synthetic assets. They are combined with UST, and users will have to first deposit liquidity into the mAsset-UST liquidity pool on Uniswap before being able to participate.
The APY generated from these strategies are quite high and range from 170% to 210%.
Mirror is a protocol that allows for synthetic assets that can be created on the blockchain. It is a protocol that is powered by Terra itself as the smart contracts are built on top of the Terra protocol. The synthetic assets are tracking the price of real-world assets. To mint an mAsset, the issuer has to lock up more than 150% of the current asset value in Terra stablecoin (UST) as collateral.
The farming strategies in this group are tracking real-world stocks. The stocks include Apple, Amazon, Google, and Tesla.