On August 31, 2020, Harvest Finance (FARM) – an automated yield farming protocol that puts users’ idle crypto assets to work in high-yielding farming opportunities – opened for deposits on the Ethereum mainnet.
Harvest couldn’t have launched at a better time. The DeFi space was booming with Chads, whales, and noobs aping into anything DeFi related. It was like the 2017 ICO season all over again. Gas prices went berserk, scams were plentiful, everyone was hungry, it was a chaotic time.
What was a humble yield farmer to do? How could they possibly navigate this novel degen DeFi world?
Enter Harvest Finance, a godsend from anon Giga Chad devs.
Harvest industrialized yield farming by automating the yield farming process. It enabled users to automatically put their idle crypto assets to work in high-yielding farming opportunities that follow the latest and greatest strategies.
It saved humble farmers countless hours of time and gas while maximizing yield. In doing this, Harvest created a sustainable community-governed farming cooperative that only has one goal in mind, “Bread For The People”.
The Problem of Gas Expensive Farming
Not only is yield farming without automation extremely time-intensive and complicated, but it can also be expensive.
To farm a strategy successfully, you must make multiple deposits and withdrawals to and from different DeFi protocols and pools and then repeat those steps for continuous compounding. All of these transactions require gas and the fees stack up quickly, especially when DeFi is booming and the Ethereum network is congested.
To provide an example of Gas expensive farming, here’s what a humble farmer has to successfully farm at Curve.fi:
- Deposit stablecoins at curve - (gas)
- Receive yTokens and deposit them into the Curve DAO - (gas)
- Wait x amount of time, harvest CRV - (gas)
- Sell your harvested CRV to stablecoins - (gas)
- Repeat the steps above for continuous compounding - (gas) (gas) (gas) (gas)…
To better visualize the yield farming process described above, see the diagram below:
Harvest.Finance’s CRV Strategy and v1 Profit Sharing (Source)
As you can see in the illustration above, in order to successfully farm at Curve.Fi you must take multiple gas-intensive steps.
Therefore, farming manually takes an immense amount of time, sophisticated strategizing, and enormous gas costs.
How Harvest Changes This
Harvest’s automated yield farming protocol completely revolutionizes the way farmers farm through the following ways:
- Gas Efficient Farming
- Farming at Scale
- $FARM BuyBacks and Profit Sharing
Gas Efficient Farming
In the Curve.Fi farming example above, there are a lot of steps requiring you to pay gas when farming manually. When farming with Harvest Finance, however, the protocol does all of those manual steps for you. It removes all these steps by bundling actions together into one transaction, meaning you only pay gas once.
Therefore, the cost savings from using Harvest Finance is truly immense. If thousands of farmers manually farm on Curve.Fi, the individualized gas costs might be $200,000. But if they all use Harvest Finance, the gas costs become just $200 and are shared across all users.
Money saved in time and costs = More Bread for the People.
Here’s another scenario where Harvest saves you gas:
Say you’re farming on Curve.Fi like in the example above, but then you suddenly realize you could earn more interest in a different protocol, such as Cream Finance. Now you have to withdraw your funds from Curve (gas) and deposit them on Cream (gas). Rinse and repeat (gas).
Harvest Finance removes all these steps by atomizing this entire process, saving you not only gas but your time and effort as well.
Farming at Scale
Active Yield Farming Vaults on Harvest Finance
Harvest automatically farms the highest yields available across various DeFi protocols. In other words, Harvest enables you to easily farm at scale by automatically deploying your deposited capital in a wide abundance of lucrative farming strategies using various DeFi protocols.
The DeFi protocols currently supported by Harvest Finance include: Curve Finance, Compound, SushiSwap, Idle Finance, Keep Network, Index Cooperative, Mithril Share, and Basis Share.
Using a variety of these protocols, Harvest enables users to deploy capital across 22 different vaults with high yielding strategies, which are all available from one dashboard (more intuitive than Yearn Finance).
$FARM BuyBacks and Profit Sharing
$FARM Profit Sharing Pool (Source)
Yet another reason to use Harvest Finance for yield farming as opposed to manually doing it yourself is to earn the protocol’s native token $FARM and stake it in the Profit Sharing Pool to earn even more rewards.
Humble farmers can choose to stake their earned $FARM tokens in the profit-sharing pool to receive a portion of 30% of the yield farming revenue earned by all farmers on Harvest Finance.
The way it works is:
70% of the yield farming revenue generated by Harvest Finance goes directly to the humble farmers who supply the capital that generates yield (APY %). As for the remaining 30% of yield farming revenue, it is used to buy $FARM tokens directly from the market en masse.
These $FARM tokens are then distributed to users who stake $FARM in the Profit Sharing contract. The number of $FARM tokens stakers receive is proportionate to their weighted stake in the Profit Sharing Pool.
That said, not only do Harvest Finance farmers benefit from the highest available yields, they also benefit from additional $FARM rewards from profit sharing too.
Also, even $FARM token holders who do nothing but hodl benefit as well because the 30% buybacks create enormous $FARM buying pressure that props the price up.
Community & Investor Outlook
When Harvest first launched in early September 2020, its community and investors alike overwhelmingly supported the protocol.
Harvest grew very fast and reached over $500,000,000 in total value locked (TVL) in just under two weeks and was saving farmers $500,000 in gas fees per day (~$3.5 million per week) in its peak!
Fast forward to today, and Harvest continues to gain ground with a current TVL of ~$325M. This is actually quite impressive considering that in October 2020, Harvest suffered a flash loan attack resulting in the loss of $31.4M user funds.
The reason Harvest was able to recover from such a loss is due to its committed community of humble farmers who voted to provide reparations to those affected by the exploit in the form of an IOU token known as $GRAIN.
Now, as Harvest is back on its feet, the protocol is going head to head with its competitor Yearn Finance (YFI). The two yield-aggregator platforms are in a constant battle for yield farmers’ capital and are consistently ranked very closely in terms of their TVL on DeFi Pulse:
However, while Harvest and Yearn are close in TVL, they are far apart in Market Cap. Yearn’s $YFI token is ranked in top 50 while Harvest’s $FARM token is ranked #250+. That’s a considerable difference considering their TVL and the value they provide are relatively the same.
Also, check this out:
Harvest Finance’s Market Cap/TVL Ratio is far below 1! (Source)
Harvest’s Market Cap/TVL Ratio is at 0.11, meaning it has way more TVL than its market cap! That’s an extremely bullish signal and shows that $FARM is undervalued by a ton. In comparison, Yearn’s Market Cap/TVL Ratio is at 2.83.
That said, I'd say Harvest Finance is incredibly undervalued and has some catching up to do.
Now to end things off, let’s not forget that Harvest Finance has the Giga Chad meme on its side. It’s easy to go viral with this meme and can be used in a lot of ways. Here’s Chad as a humble farmer harvesting that beautifully high yield:
Cheers guys, see you in the next one.