Unless you live under a rock and even then it would be hard to miss all of the crypto news in 2021. Bitcoin, Tesla, & DeFi are all something that would have come across your ticker. Even with everything to capture your attention there's still something you will want to read: The DAI Stablecoin Strategy You Need to Know About in DeFi on Harvest Finance
What is Farm?
If you're like most, then it might be easy to brush off Harvest Finance, or as many say FARM, as just another one of those foody Decentralized Finance (DeFi) thingies... Fortunate for all of us, we know you're not like most if you're reading this article.
Harvest Finance is the platform and Farm is the token. Yes there have been plenty of food based defi options over the last year from Sushi to plenty others that we won't even acknowledge, yet what has been the differentiator when it comes to Harvest Finance is crop spotting.
Sounds simple yes, but basically, the FARM token is the cash flow token for the Harvest platform. More importantly the Harvest platform is looking to acquire the crops (earnings, etc.) from as many of the DeFi space operators as possible to leverage maximum gains and minimizing fees by value at scale.
Barrier to Entry
Like many DeFi platforms the biggest barrier to entry can be education. All it takes is a quick web search to find countless examples of bad experiences from those who realized impermanent loss, or worse yet, have been on the receiving end of an arbitrage that seemingly came out of nowhere.
Not sure who said it exactly but the sentiment still remains;
A journey of thousands of steps starts with but one.
That's what we will look into here with a DAI stablecoin strategy that could be helpful for your first step.
DAI Stablecoin Strategy
Think of the best basketball player in the world, whether it's Hardin, Kobe or even MJ23. Doesn't matter who it is, at some point they all had a DAI Stablecoin Strategy. What kinda strategy is that, you might be asking?
Well it's not the high flying, buzzer beaters that you're thinking of. It's the grind that creates the foundation for everything else. MJ23 practiced at 5 am during the off season with a mission of winning championships. I don't recall the announcers talking about his 5 am practices, but rather the time he through down on Shaquille.
If all of the NBA talk has left you scratching your head, in its simplest of terms, in the DeFi space having a consistent strategy will pay off over the long haul as well as provide the experience to grow and develop.
So in this strategy here' a couple points you might want to consider.
- You're in it for the longer haul. Yes it's a relative term for everyone, but the longer you can stay at play the better your exposure and upside.
- Let's talk about this in round numbers and think about $1,000 as your operating amount.
- Knowing that could seem a little high, it's just thinking about gas fees at this current place in time. You may have seen the meme about the fella over his coffee;
- Also, it's not the worst thing in the world to approach all of this with your farming cycle in mind. Meaning, if you're in this to deposit and then withdraw just as quickly, you may want to have bigger numbers to work with. In the short term, after just a couple cycles everything should start making sense and you seeing results, yet as we pointed out in the first bullet, longer term is better.
- Basically, the strategy is to deposit DAI, then turn around and invest your rewarded FARM to compound your earnings.
When you head to Harvest.Finance you will see the multiple options of stablecoins and their associated expected APY.
Let's remember the intent behind all of this. To put our resources to work so you don't have to. Providing #BreadforthePeople as the good folks at Harvest Finance like to say.
The levels of who is involved can cut across the board. When someone is really good it doesn't matter if they are operating the most simple or the most complex of operations, the results are what matters.
With this particular strategy focusing on DAI which then turns to fDai the process is well formulated to the beginner in the crop spotting realm.
At a glance you can see what DAI is expecting in APY at just a hair over 21%. No complaints there.
And to get things going that's not a bad haul.
You can see the volume and expected reward structure overall. When someone gets a little flight time in their log then it's time to move up. We can discuss it another day, but take a look at some of these numbers in the DAI realm.
I don't know about you, but I want in on those APY%. It turns WAM money (walking around money) into some "Big Shoe" money real quick.
Who is this for?
Ultimately you might be thinking, who is this really for? Is this an approach for just the whales or the folks with 1k burning a whole in their pocket.
Well it is something that everyone can do. Even like the meme above, if you were able to have $20 out of a 100 working for you at 21% APY, well it might take some time to make your money back, but if you get good enough and start operating in the bigger circles such as the plus 300% APY, then that's a different story altogether.
Granted you would need plus 500% in this scenario, but you get my drift here. Fortunately you are able to see what the gas fees are and would know all of your costs up front in managing your risk.
So after this brief read up on Harvest Finance, there are a few parting crops, I mean thoughts about what the world has to offer.
Depending on whom you follow for your information you would by now have seen more than one analyst look at the timing of this halving cycle and think about what the world looks like after say August or September 2021.
At that point or in reality, just before that time, having a plan to execute which follows a strategy is critical to your success overall. Everyone's plan is different, but the key ingredient is, whether you follow your plan or not.
My grandmother used to talk about the corn and say if it was knee high by the fourth of July then they would have more than one rotation for the year. What's your trigger for this year's run and where are you planning to operate when the bear rears its head as it always does?
In the meantime, keep thinking #BreadforthePeople!