On June 9th, Harvest Finance surprise launched their first-ever Uniswap V3 strategies, allowing farmers to deposit funds directly into V3 liquidity pools and start earning $FARM as a reward on top.
Providing liquidity to Uniswap V3 is quite interesting as liquidity providers do not have to just simply put their assets into the pool and spread them evenly at a 50/50 ratio. Instead, the liquidity providers can choose a price range for which they would like to allocate their assets and earn from fees only when the price is within that pre-selected price range.
Harvest Finance is known to make farming strategies extremely simple. As a result, they had to develop a solution to make farming on V3 strategies as simple as any of their previous strategies.
Luckily, they have stayed true to form and made it extremely simple to deposit into the strategy. Unlike their previous strategies, you don’t have to provide liquidity to the pool on your own and then take your LP tokens into the Harvest Finance dashboard. Instead, you can directly deposit your assets from the Harvest Finance dashboard. You don’t even need to provide both assets as Harvest Finance will manage the Uniswap V3 pool for you and swap the assets accordingly.
The solution then allows users to save tons of gas and zap in and out easily with their auto-swap function. In addition, farmers would earn Uniswap V3 fees collectively with everybody else in the strategy and earn $iFARM as an additional reward.
So far, Harvest Finance has released seven different Uniswap V3 farming strategies, which can all be seen in the Tweet above.
In this article, I would like to cover how to easily deposit your first assets into these new V3 strategies and get farming.
How To Deposit Your Assets Into the New Uniswap V3 Harvest Finance Farming Strategies
First of all, head over to Harvest.Finance and connect your wallet. In this case, let's connect to our MetaMask Ethereum wallet;
Once connected, it is time to deposit your funds into your desired strategy. For the purpose of this tutorial, I will be depositing into the UNIV3: DAI-ETH pool as I have both of these assets. However, the method to deposit into any of the Uniswap V3 strategies is identical.
Simply click your desired pool to open up that specific dashboard;
Okay, there are a few things to quickly go over here before we actually go ahead and make the deposit. First of all, if you hover over the estimated APY earned, you will see the following information;
It explains that the APY (in this case, 93.97%) will automatically go into auto-compounding for you. It also states that 2/3rd of $iFARM rewards are vetted for 6 months and will not be received until the vesting period is over. Additionally, the last note confirms that you will earn Uniswap v3 trading fees.
The second piece of important information to cover is what is explained in the Vault Details section;
When you hover over “Vault Details,” the information box will pop up;
The important part to pay attention to is at the top of the information box;
At the start of this article, I explained that liquidity providers in Uniswap V3 could set a price range to earn their fee from in the liquidity pool. This box shows the price range that Harvest Finance sets in the strategy.
Here, we can see the Min and Max price for both DAI and ETH. If the price is outside of this range, the strategy will not be earning fees from Uniswap as assets in the liquidity pool will not be utilized for swaps.
Harvest Finance explains that when the price moves a lot and goes out of the range, the platform will deploy additional vaults with updated ranges. Users would then have the option to decide if they want to zap to the new vault with an updated range and save significant fees for the users compared with interacting with the Liquidity Pool themselves;
Once you are happy with your selected strategy, it is time to deposit your assets. In the Uniswap V3 pools, you have the choice to deposit just one asset or both assets. If you hit the “MAX” boxes, it will bring up the total amount of each asset you have in your wallet;
As you can see, I have around 280 $DAI and 0.229 $WETH inside my wallet. This is a little more than I would like to deposit into the contract. So instead, I will adjust it to 200 $DAI and $150 worth of $WETH - around 0.06 $WETH.
Remember, you don’t have to deposit the assets in a 50/50 ratio anymore here. If you have the “Auto-swap to correct ratio” check box selected, the deposit will make the best effort to swap the token to the correct ratio as required by the pool. This would allow for all the tokens to be used as liquidity;
Once you are happy with the volume of funds you would like to deposit into the pool, go ahead and click “deposit.” Make sure that the “Stake for rewards” checkbox is checked as this would allow us to stake our rewards for auto-compounding automatically;
After hitting deposit, a series of MetaMask windows will appear asking you to confirm the deposit. The first MetaMask window is asking for permission to allow Harvest Finance to spend your $DAI. Note the transaction fee and hit “confirm” if you are happy;
Once that transaction has been mined, another MetaMask window will appear, asking for the same permission to spend $WETH. Again, note the transaction fee and hit “confirm”;
The next MetaMask window is for a contract interaction request from Harvest Finance. As we are interacting with a smart contract, the fee will be significantly higher. If you are happy to go ahead with it, click “confirm”;
Once that transaction has been processed, the fourth MetaMask window will appear. This time, it asks for permission to allow Harvest Finance to spend your fUNIV3_DAI-WETH token. This is the token your receive when depositing into the Unisawap V3 strategy. It can be thought of like a receipt for your deposit and almost acts as an LP token provided by Harvest Finance.
Simply hit “confirm” again;
After that transaction is complete, the last MetaMask window will appear, asking you to confirm the staking of your fUniV3_DAI-WETH token. This is basically putting our deposit into the actual Harvest Finance farming strategy itself and allows us to earn $iFARM rewards;
That’s all there is to it. You have now deposited $DAI and $WETH into the UNIV3: DAI-ETH farming strategy on Harvest Finance and are earning from the Uniswap V3 fees with an additional $iFARM reward on top.