Hello everyone,
I hope you all are having a nice day, welcome to CryptoGod-1's blog on all things Crypto. In this post I will be looking at the recent change to the payments on Publish0x, with FARM being phased out and replaced by STA on the Fantom Network. The announcement from Publish0x stating this can be found here: https://www.publish0x.com/publish0x-official-blog/publish0x-launches-fantom-network-integration-starting-with-xnxdkvz
I will be focusing on a big choice users have to make over the next couple of days: withdraw your FARM Tokens or let them be converted into STA. Below I have highlighted a bit of info on both FARM and STA, showing the pros and cons of both. I will not be recommending either option, merely giving some insight into both to help users make an informed decision.
FARM - Harvest Finance
What is FARM?
FARM is an ERC-20 (Ethereum Network) made as part of the automated yield farming protocol known as Harvest Finance. It was created for users who are interested in securing their assets in a high yielding farming opportunity. It does this by allowing users to deposit their assets into Harvest Vaults, basically providing asset management to its users. These vault basically execute various yield farming strategies, with the profits from these strategies then split between liquidity providers and rewarding users staked in their profit sharing pool.
The summer of 2020 saw the need for more cost effective decentralized finance (DeFi) opportunities on Ethereum due to the complex and gas intensive processes. Harvest Finanace was created so users could basically pool their assets into strategized vaults and achieve the promised high APY's without the high gas fees. The protocol performs the necessary transactions on the users behalf, ensuring the users can leave their assets without needing to constantly watch them. By October 2020 the protocol reached a total value locked (TVL) of $1 Billion. The developers remain anonymous, and the FARM token was created and distributed with no pre-mine or pre investors. The token supply has been maxed at 690,420 tokens. The protocol suffered from an exploit via flash loans in October 2020, seeing roughly $24 million lost. This resulted in a drop in TVL to around $335 Million, and the value of the FARM token dropped from around $255 to $100.
FARM Value
At the time of writing, the price of FARM is $96.45, with a market cap of $63,181,497, and is ranked at #516 on Coingeko.
The all time high price of FARM was recorded at $410 in February 2021.
As per The Coin Perspective, if FARM had the current market cap of Bitcoin, which stands at $737.4 Billion, its value would be $1.1 Million per coin.
Advantages and Risks of FARM
The main advantage of the FARM token is the fact it is tied to Harvest Finance as its native token. Users make use of Harvest Finance because the process of manual farming takes too long and is very time consuming for the individual. The high gas fees also make most yield farming ventures unobtainable for the average trader. With so many users pooling their funds together, the value of FARM is tied to the TVL of its protocol. Users of Harvest are rewarded in farm, and it has a high APR when staked. These factors mean that users who have FARM tokens may wish to retain them in the hopes of a higher value down the line, or to earn anywhere over 10% in staking rewards from CEX's or DEX's.
The risk of holding FARM is obviously the same as most DeFi protocols. Smart contract bugs, stable coins being unpegged, and correlation risks are some examples, and if one of the prominent blocks in the protocol fails, the others could tumble along with it. The hack showed how smart contracts can be exploited and had detrimental effects of the price of the token, and the 'Whale Factor', when big traders invest or withdraw large sums it greatly influences the APY of rewards on the protocol. This can influence other users to withdraw their funds, and see the value of the token fall.
STA - Statera
What is STA?
Statera (STA and wSTA) is a smart contract powered Indexed Deflationary Ecosystem which began as an Ethereum token but got transitioned over to the Fantom Network. It is primarily used for arbitrage opportunities, running off a trustless and community-driven portfolio of class-leading cryptocurrencies. Every trade involving Statera creates these arbitrage opportunities for users, resulting in driving volume across the entire Statera ecosystem and ensuring that higher fees are paid to liquidity providers. The setup of Statera's smart contract is designed in a way that makes 1% of every transaction permanently destroyed, increasing positive price pressure.
It has an initial supply of 101 million token, which have seen over 24.4 million burnt on the Ethereum network while over 450 thousand have been burnt on the Fantom network.
STA is the main digital asset of the Statera ecosystem, and forms the cornerstone of the smart contract. It has a deflationary mechanism as mentioned above to increase price pressure and reduce volatility. STA has been natively bridged to the Fantom network from the Ethereum network, meaning that STA can only be minted when bridged from Ethereum, and continues to deflate with every transaction. The reason they were bridged from Ethereum to Fantom is because the Statera Ecosystem thrives on low-cost, high-frequency transactions.
The wrapped version of STA, known as wSTA, can only be minted by wrapping the STA token. Similar to every transaction of STA, the wrapping process will always burn 1% of the original STA, meaning 100 STA will give 99wSTA. Wrapped Statera can also be unwrapped at any time and returns STA to the holder.
STA Value
At the time of writing, the price of STA is $0.077, with a market cap of $6,135,339, and is ranked at #1362 on Coingeko.
The all time high price of STA was recorded at $0.36 in August 2020.
As per The Coin Perspective, if STA had the current market cap of Bitcoin, which stands at $737.4 Billion, its value would be $9,265.04 per Coin.
Advantages and Risks of STA
The main advantage of STA is that as it is completely decentralized there is no fear of the project itself changing tack or direction from control of a single entity. It caters to those who are risk-adverse and also those who are risk hungry, while the developers hold only 4% of the total supply and this cannot be changed. Having been audited by Hacken, the protocol code has been verified to ensure this remains true. Due to its deflationary mechanism, holders of STA are rewarded for being loyal to the project over time through increased positive price pressure. Holders of STA can also avail of the arbitrage opportunities between STA and wSTA, while the liquidity pools offer high returns and rewards for funding from users.
The drawback of STA is simple that because it is the first mover working towards a decentralized deflationary currency it poses the risk of a dimishing or non active community. This would hinder the efforts of ensuring the project remains on track, although the developers have addressed this in their whitepaper under 'The Future' section. Another risk to the platform is the fact it is indexed to the cryptocurrency market, meaning a long bear market could put its developments at risk. This being said it did survive the previous bear cycle compared to many competitiors. The final and most obvious risk could be a flaw or bug in the code of the project, making it no longer function or operate.
Conclusion
Both the tokens, FARM and STA, have shown promise in terms of their potential value. While I cannot and will not advocate on whether or not users should lean towards one over the other, I believe it should come down to what your interests are crypto wise. If you are interested in yield farming then retaining your FARM and making use of Harvest Finance could be the option for you. On the other side, STA also offers high rewards for liquidity pools, and if you are more interested in taking advantage of arbitrage opportunities then building up a large supply of STA and converting whatever FARM you already have on Publish0x may be the route to take.
Thanks very much for reading and I hope you enjoyed the article, and hopefully it will help in some way towards making an informed decision on what to do with your current FARM earnings on Publish0x.
Have a great day.
Peace. CryptoGod-1.
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