This post will be focused around why I think the creation of BSC yield farms on HarvestFinance is going to be a game changer in the crypto world.
Before digging deeper into what are the farms being offered by Harvest on BSC and how and why you should use them, you need to first familiarize yourself with what Harvest is as how it has been instrumental in re-shaping the crypto adoption since it’s launch in September last year.
This article will cover why was HarvestFinance created, how it has been helping retail investors since it’s inception and how it continuously keeps evolving keeping the interests of small investors a priority.
Chapter 1: The Origins of Harvest Finance
HarvestFinance was started in September 2020, when the ETH transaction fees had already started to creep up. This meant that every transaction related to yield farming like creating a pool, staking a pool, unstaking a pool and claiming rewards earned involved a transaction fee about $5 to $10 depending on how congested the network was at that time. If you wanted to move from one farm to another farm it meant repeating all these costly transactions all over again.
This was impacting small investors even more severely as they could not move from one farm to another farm for a better yield rate as the fees would eat up all the potential gains they would get.
HarvestFinance came to the rescue of these retail investors specially the ones who were new to crypto and did not have much knowledge about yield farming. They were not sure which was the best farming option and what parameters to look while selecting a liquidity pool. There were many DeFI platforms already running like Compound, AAVE, Uniswap, Curve, SushiSwap and there were new ones coming up regularly. For newbies it was a difficult task to gain an understanding of how these platforms worked and research which was the best one. On top of this it was nearly impossible for them to keep up with the new platforms coming up every other day.
This dilemma of small investors was solved by HarvestFinance by letting people stake their coins and liquidity pairs and HarvestFinance would search the best platform at any given time for the coins or liquidity pairs. If in future another platform offered a better yield rate then HarvestFinance would automatically move the funds to the better platform without the investors having to pay any transaction fees for the move. This way the investors got the best rate available at all times for the coin they staked. To add icing to the cake Harvest also offered FARM token payout to investors staking in their pools. They could further stake the FARM they earned which was earning more than 100% APR. This was a golden opportunity for both crypto newbies as well as the old veterans and investments being staked in Harvest started to grow exponentially over the coming months.
This was a golden opportunity to get the best returns aggregated over all the popular DeFI platforms and in less than 2 months the TVL (Total Vale Locked) in HarvestFinance crossed the $1 Billion mark. In a short span of time Harvest had firmly established itself as the most attractive DeFI platform for ERC 20 tokens.
Chapter 2: The $24 M Hack and Betrayal of Crypto Principles by Ethereum
Things were running perfectly smooth for HarvestFinance until an incident late in October put a damper in their tractor’s engine.
On 26th October 2020 an unidentified hacker (or group of hackers) exploited a weakness in their Curve pool and hacked $24 million worth of funds. Soon the news spread and created panic among the investors. People started moving their funds out and the TVL of Harvest sharply fell from $1 Billion to less than $400 Million. Their native token FARM also took quite a hit from it’s value close to $300 it tanked to less than $100.
HarvestFinance took the most practical steps to bring operations back to normal. They apologized to their investors for the vulnerability that led to the hack and confirmed that now they were ensuring more secure checks to avoid any future hacks.
Slowly the investors started coming back to Harvest and it started it’s journey back to a stronger recovery. However it was soon clear that the difficulties that Harvest would face were far from over. The next challenge that arose was not something specific to Harvest but something which was threatening to cripple the entire ETH DeFI space. Due to the spiraling ETH fees it became common to encounter $100 to $200 ETH fee for a basic transaction and at certain peak times it got even higher.
This made all the ETH based platforms practically useless for retail investors and they stopped yield farming completely, waiting patiently on the sidelines on the ever delayed dreams of ETH 2.0 coming to their rescue.
This was a severe betrayal of core blockchain principles, as crypto was created to salvage the common investors from greed and corruption of big banks. However looking at the current scenario it was clear that the DeFI space was being clearly manipulated to the whims of big whales pushing the small investors out of the game.
Chapter 3: The Emergence of Binance Smart Chain (BSC)
The stalemate for retail investors in DeFI continued until January 2021 but then a new phenomenon came into existence called the Binance Smart Chain which had basically replicated the DeFI show being run on Ethereum.
PancakeSwap came up with the same interface as SushiSwap and similarly the main functionalities of AAVE, Uniswap were replicated on BMX, BunnySwap etc.
Everyone had noticed the crazy popularity that Harvest enjoyed in the ETH DeFI space so soon a HarvestFinance replica came up in the form of AutoFarm. It used the same approach of Harvest by auto-compunding the gains the platform and offering their native noken AUTO as rewards across the farms. The site also had a strong resemblance to Harvest.
Despite not coming up with an original idea AUTO was able to replicate the wild success that Harvest had achieved during its initial months and soon the TVL of AutoFarm crossed the $1 Billion mark which was coming mainly from the small investors who had been disillusioned by the apathy of Ethereum.
Things were now starting to look really grim for the future outlook of all ETH DeFI platforms including Harvest.
Chapter 4: The Dangers Surrounding Binance Smart Chain (BSC)
While a vast majority of small investors jumped over the ever accelerating BSC bandwagon, lured by the low transaction fees and crazy APYs they soon realized this BSC space had it’s own dangers.
People were jumping into BSC by the hordes but this area was still the wild wild west of crypto. Majority of newbies got blinded by the incredibly high APYs offered but soon they learnt a hard lesson that most of these projects were scams and there seemed to be happening at least one case of rug-pulling everyday if not more.
Even some projects which were not outright scams will get into troubles, as the developers will be constantly pushing to lauch new features to beat competition they would compromise on security and the moment a hacker would even the slightest weakness in the code we would drain all funds. This happened to many well intended projects which did not devote the necessary time for security audits.
Chapter 5: The Entrance of Harvest.Finance in BSC Space
Considering the risks surrounding BSC, it was very evident that people needed a platform they were familiar with and could trust with their investments. This is where Harvest.Finance came into the game. It was the most popular yield farm aggregator of retail investors on Ethereum and it took the logical step to extend support to BSC farms so the farmers who had stopped farming due to ETH prices could come back to farm.
We must appreciate the agility with which Harvest made this integration with BSC farms. In no time it was able to aggregate most of the popular BSC projects like Venus, Pancake, bDollar and Goose under it’s umbrella. Within a few days of launch it already has over $18 Million invested in the pools. It is a small number compared to the $1 Billion it was holding at one point but I am sure if Harvest continues to maintain the high standards it will soon surpass the $1 Billion mark once again as the funds pouring into BSC are rising by the day.
Chapter 6: The Future of Harvest.Finance in BSC
The next months ahead are going to be quite challenging for HarvestFinacne but I am sure it is well prepared for them as it has seen so many ups and downs already and came out triumphant all the time.
It’s biggest challenge will be that it is a bit late to the BSC party with several existing incumbent platforms like PancakeSwap, BunnySwap, AutoFarm have already established themselves firmly with over $1 Billion each in TVL. They have already been around for a few months and know which are the signs of a scammy project to be avoided. They know which features like auto-compounding attract investors. What Harvest pioneered last year by offering native FARM to cross-platform pool rewards they have already replicated well with their native tokens like CAKE, BUNNY and AUTO.
Harvest will have to be really innovative to bring fresh investments and think of ways how it can offer benefits which are not being provided by Pancake or AutoFarm. The clear advantage it has is that it has faced tough time already and is prepared well to handle any threats and hacks. It actually came back stronger after the hack which has reinforced the trust people have in the project as they can see the team behind is really dedicated and will not give up no matter how tough the circumstances.
These are the key reasons why I am really bullish on HarvestFinance and I think it will create a space for itself in BSC and as always it will be really helpful for the people it cares the most about, that is the retail farmer Chads.
This article has been re-published by me on the following platforms:
- Medium- https://sambtc.medium.com/why-bsc-farms-on-harvest-finance-is-a-game-changer-7a68a5257663
- ReadCash- https://read.cash/@SamBTC/why-bsc-farms-on-harvestfinance-is-a-game-changer-922dfdf2
- Uptrennd- https://www.uptrennd.com/post-detail/why-bsc-farms-on-harvest-finance-is-a-game-changer~ODg3MDE1
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