Hey guys :) I’m back with another comprehensive Q&A piece, this time for the highly lucrative automated yield farming protocol – Harvest Finance (FARM).
Harvest Finance puts users’ idle crypto assets to work in high-yielding farming opportunities that follow the latest and greatest strategies.
Now, before we dive in, the following piece is similar to my latest articles on The Graph (GRT), SushiSwap (SUSHI), and Saffron Finance (SFI), so if you haven’t already seen those, be sure to check them out as well.
Hope you enjoy!
The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:
- What is Harvest Finance?
- Who and When Created Harvest Finance?
- What is $FARM Token Used For?
- What is Farm Profit Sharing Pool?
- What are fTokens Used For?
- How is Harvest Finance Governed?
- What's the difference between Farm and Yearn?
- Where to Store Harvest Finance’s $FARM Token?
- Where to Buy & Sell Harvest Finance’s $FARM Token?
1. What is Harvest Finance?
Harvest Finance website homepage
Harvest Finance is an automated yield farming protocol for crypto holders looking to put their idle assets to work in the highest producing yield-farming opportunities.
Harvest returns the highest yields for its users by automatically deploying their deposited capital to a variety of DeFi protocols, and optimizes the yields on that capital by shifting it between various protocols to hunt the best returns at the given time.
Harvest’s FaaS platform is great for users who want to put their idle crypto assets to work, but don’t have the knowledge or expertise on how to deploy and manage their assets in different DeFi protocols. Also, it’s even great for experienced DeFi users because it saves them time and gas costs while maximizing yield.
It’s really just a simple and convenient way to harvest the highest yield opportunities available from the latest projects in DeFi. It lowers the barriers to entry, saves on gas costs, and automates the movement of funds between opportunities.
With Harvest Finance, the average Joe can keep up with DeFi 24/7 and earn the highest possible yields by simply deploying their idle crypto assets in the protocol.
2. Who and When Created Harvest Finance?
Harvest Finance was created by anonymous DeFi devs who were inspired by Andre Cronje, the founder of Yearn.Finance, for his ability to create such useful DeFi infrastructure. Following his lead, the anon devs created Harvest as a competing protocol to Yearn.
The Harvest protocol launched in 2020 when it opened for deposits on Monday, Aug 31st, and launched its FARM rewards for incentive pools on Tuesday, Sep 1st.
In just two weeks after launch, Harvest.Finance grew its community to over 8,500 members and reached over $500,000,000 in total value locked (TVL).
And the growth didn’t stop there.
In just two months after launch on October 21, Harvest Finance surpassed $1B in total value locked (TVL) in its protocol:
The explosive growth and success of Harvest Finance were unprecedented at the time.
3. What is $FARM Token Used For?
Harvest Finance (FARM) logo
The native cryptocurrency of Harvest Finance is $FARM and it serves primarily as a cashflow token for Harvest.
How to Earn $FARM:
- Stake $FARM in the Profit Share Pool to receive 30% of revenues on AUM
- Provide liquidity to certain pools, receive LP tokens, and stake those LP tokens to earn $FARM rewards
- Participate in contests and Harvest events to earn $FARM rewards
$FARM Token Distribution:
Harvest’s $FARM token has not all been minted yet. The total maximum supply is 690,420 FARM tokens and the total supply is currently at around 421,981 FARM.
70% of all $FARM tokens will be distributed to Harvest Finance liquidity providers until all FARM has been minted and distributed. In the first 4 weeks of Harvest Finance, 181,320 FARM (3.63% of supply) was minted and distributed to early participants who helped bootstrap the network.
After week 4, there’s a constant emission of 23,555 FARM minted per week for 4 years until the year 2024 when the maximum supply is reached.
$FARM Token Distribution:
- 70% for liquidity providers from incentive pools
- 10% rewards to the operational treasury
- 20% rewards to the team for building Harvest
4. What is the Farm Profit Sharing Pool?
Harvest Finance’s Profit Sharing Pool is a pool where humble farmers (users) can stake $FARM tokens to receive a portion of 30% of the profits generated by the LPs. The number of $FARM stakers receive from this pool is proportionate to their stake in the Profit Sharing Pool.
Where does the 30% come from?
While 70% of the profits made from Harvest’s automated yield-farming protocol are distributed to depositors, the other 30% of profits is used to buy $FARM tokens directly from the market en masse. These $FARM tokens are then distributed proportionally to stakers in the profit share pool.
The Profit Sharing Pool not only benefits $FARM stakers in the pool, it benefits every single $FARM token holder. This is because Harvest must buy $FARM en masse from the market and this buying pressure further reduces the available $FARM supply and pushes up the price as a result.
Moreover, in addition to funding the Profit Sharing Pool with 30% of the profits generated by LPs, the pool also receives weekly $FARM emissions from the total supply of 690,420.
5. What are fTokens Used For?
fTokens, tokens with an “f” in front of them like fDAI, fUSDC, and fWBTC are the yield-bearing versions of these assets which are being automatically farmed by the harvest algorithm. These tokens automatically appreciate and can be redeemed for their real, underlying asset (ie. DAI, USDC, WBTC, etc) at any time.
USDC fToken, “fUSDC” Example:
When you deposit USDC into a Harvest pool to earn an APY on that deposited asset, you receive fUSDC tokens in exchange for your USDC. These fUSDC tokens automatically appreciate in value earning interest.
You can choose to redeem your fUSDC for USDC at any time or you can choose to stake it in eligible pools to start earning $FARM rewards.
All in all, fTokens play an integral role in the tracking of APY and $FARM rewards earned in the Harvest Finance protocol.
6. How is Harvest Finance Governed?
Harvest Governance Proposals (Source)
The day-to-day running of Harvest Finance is run by Harvest devs. The devs make important decisions on things like incentive distribution, strategy deployment/updates, addition/removal of vaults, etc. There is no pure form of a DAO yet.
However, Harvest’s governance isn’t solely run by devs. The Harvest community of $FARM token holders has a voice and voting power for various higher-order strategic decisions. All Harvest governance polls in which $FARM token holders can participate can be found here.
Some Harvest governance proposals in which $FARM token holders have participated include:
- The restructuring of the emission schedule
- The decision to issue GRAIN as reparations after the October 2020 exploit
- The decision on the percentage of GRAIN buyback program
- Harvest grants for the Ethereum ecosystem
- + More
7. What's the difference between Harvest and Yearn?
Yearn Finance (YFI) logo
Both Harvest and Yearn are automated yield farming protocols that put users’ idle crypto assets to work in high-yielding farming opportunities. However, there are many differences between the two as Harvest is not a clone of Yearn, it was written from scratch.
Differences between Harvest and Yearn:
- Fees - Harvest has lower fees
- Strategies - Harvest has more strategies
- Yield - Harvest has the highest yield available
- Focus - Yearn has an expansive product offering, Harvest sticks to yield-farming
Harvest charges no additional fees for withdrawing or depositing assets, while Yearn charges a 0.5% fee on funds withdrawn from active strategies.
Wide Range of Strategies
Harvest has a far wider range of yield-farming strategies and is considered to be the king of implementing new strategies. As soon as a new strategy is developed, it’s deployed on Harvest.
Highest Yielding Farm Opportunities
Since Harvest implements a wide range of new strategies ASAP, the % returns on Harvest are often the best in the industry. Harvest Finance is known for the highest yield available from the newest DeFi protocols.
Yearn has expanded its product offering to different segments like insurance via COVER and lending via PICKLE, while Harvest keeps its focus on high-yielding farming strategies.
8. Where to Store Harvest Finance’s $FARM Token?
MetaMask wallet website homepage
Harvest Finance (FARM) is an ERC-20 token residing on top of the public Ethereum blockchain. That said, you can store FARM in any ERC-20 token supported wallet.
However, the best wallets for storing FARM are non-custodial Web3 wallets that provide seamless access to the best DeFi applications, like Harvest Finance, Uniswap, Balancer, etc.
That said, DeFi wallets are the best for storing FARM because the token is widely used and supported in the Ethereum-DeFi ecosystem.
Popular Harvest Finance (FARM) Wallets:
- Trust Wallet (mobile)
- Argent (mobile)
- MyEtherWallet (MEW) (web)
- Metamask (web)
In addition to the above-listed wallets, Harvest Finance (FARM) can be stored on a wide variety of other reputable wallets supporting ERC-20 tokens.
9. Where to Buy & Sell Harvest Finance’s $FARM Token?
Harvest Finance (FARM) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade $FARM is through centralized and decentralized cryptocurrency exchanges.
You can buy and sell FARM with cryptocurrency or fiat currency at the following top DEXes and exchanges. In most cases, you will be able to buy FARM with ETH or stablecoins.
- Uniswap - WETH, USDC, GRAIN
- 1inch Exchange - ETH, 1INCH, USDC,
- Balancer - SWRV, USDC
- 0x Protocol - USDC, WETH
- HOO - USDT
- HotBit - USDT/ETH
- Poloniex - USDT
In addition to the exchanges listed above, Harvest Finance (FARM) is also traded on a wide variety of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.