Harvest finance is one of the oldest Yield Farming aggregators. It is therefore a highly sought-after and very useful platform for fans of yield farming in DeFi.
As its name suggests, it is yet another step in the field of Yield farming, because Harvest means in English: harvest. It’s harvest time!
So why talk about Harvest.farm when there are lots (too many?) of similar protocols? What's special about it?
Harvest Finance Overview
In fact, there is a small difference with Harvest finance compared to other protocols in that it is an aggregator which will group different protocols in order to maximize and automate yield farming.
As you know if you are a fan of Yield Farming, protocols are constantly created every week. It is not easy to keep up to date because there is so much news. We barely have time to familiarize ourselves with a platform when another deemed even more profitable appears.
This can quickly become destabilizing and time-consuming. And, even painful if you use multiple protocols and do these transactions on multiple platforms. Well, it becomes so if you do a lot and you are a liquidity provider on several platforms for example.
Also, and this is the big problem, Ethereum gas fees are sometimes, often, extremely expensive. Many transactions are then aborted due to these monstrous fees. It is also because of this that the Binance SmartChain won the hearts of Yield farmers, but that's not the topic of the day.
And that’s where Harvest.Finance comes in!
Harvest Finance Overview
In fact, Harvest Finance will research and list the latest DeFi protocols and list those that offer the highest returns while optimizing them.
Thus, with Harvest.finance, we have access to the latest protocols launched on DeFi. We will therefore be able to move on to harvest time easily.
The main reason to use Harvest Finance (or other similar protocols) is that the manual farming process takes too long for the average person. And even if you have the time, high gas prices can put most yield farming strategies out of reach for the average trader.
However, by pooling funds, Harvest can save on gas costs. And even with the recent downturn, yield farming is not going away. Neither is the likelihood of gas prices dropping anytime soon. Thus, Harvest Finance offers a simple and cost-effective way to participate in yield farming.
To sum up :
What is Harvest Finance How does the Farm Pool work?
Harvest.finance is actually a kind of international cooperative of people who do Yield Farming.
When DeFi farmers deposit tokens, the Harvest protocol will automatically exploit the highest yields using the latest farming techniques.
Harvest.finance will automate yield farming by updating yields from over 30 different farms.
FARM is the treasury token for Harvest. When Harvest generates yields, 70% of those yields are used to increase the value of the yields. The remaining 30% is converted into FARM tokens which are used for:
- Reward farmers who stake their FARM token in the FARM pool.
- Increase in the value of iFARM – the yield-producing FARM. iFARM uses the FARM pool.
How to use Harvest.finance and how to make money?
For those looking to earn money, you will need to deposit tokens that are supported by the different protocols.
The FARM token
FARM is therefore the governance token of Harvest. Those who own FARM tokens have voting rights for project governance and can provide feedback on future project choices.
To receive FARM tokens, you will need to become a liquidity provider and deposit tokens or pool tokens.
The FARM token and the Harvest.Finance project was launched with great fanfare and many people immediately flocked to it. It was indeed a very innovative concept. At that time, there was not yet all the madness that we know about DeFi protocols. There certainly were, but not as many as we see now!
As we can see, it is a token that has experienced a big fall... In fact, you may have heard about it... The platform was hacked for no less than 24 million dollars... It was a big turning point for the platform. We will return to this point in a dedicated paragraph.
The total FARM token supply is set at 690 tokens over 420 years. Even if the amount of the offer could change, this is for the moment what the company has set to maintain a correct inflationary rate according to it.
You can do several things with your FARM tokens.
They can be used to provide liquidity and also as a way to earn a portion of the commissions taken from transactions.
It is also possible to stake your FARM for example and the APY rate is 60%. It's a lot, in fact.
The great thing about Harvest is that there are no additional fees for withdrawals or deposits.
If you are used to DeFi protocols, you know that the fees can be exorbitant at times. However, there are still transaction fees on swaps.
How to make farming on Harvest finance?
You can see in the screenshot the list of tokens that you can use to farm on Harvest.finance.
The APY rates are quite interesting and especially with pool tokens as you can see.
You should know that Harvest Finance regularly adds new tokens for farming. There are many assets in any case if you want to get started in the Yield farming.
How to use Harvest Finance
It is the same to use Harvest.finance as other yield farming protocols. For those who have no idea how to do it, here is a quick summary of the steps to follow. We take the example of a protocol deployed on Ethereum. Be aware that it is different if you use a protocol on a different blockchain.
Please note here that this is an explanation for staking FARM, it is in no way an incentive to do so. We do this as an example, you can very well choose to stake on another token.
If this is not already the case, create an Ethereum wallet like Dappradar.
Go to an exchange platform like Coinbase for example and buy tokens of your choice (USDC is the first choice but if you have ETH for example, this will also be possible)
Go to the Harvest.finance platform and click on “Buy Farm”.
There, we will direct you to uniswap and we will show you the official address of FARM token (from the coingecko link), you must validate and there you have the window to mine your tokens against FARM. Pay close attention to the costs which can be very significant. If necessary, wait for the fees to reduce if they are too high.
Now that you have FARM, you can return to Harvest.finance.
There you go to the line where the token farm is located. And you click on “deposit” to do your staking.
Approve the transaction to your wallet, and that's it.
Is Harvest Finance secure?
Like all DeFi and Yield Farming protocols, there are risks. And this is all the more true since we have had proof of a flaw with Harvest Finance (and many other platforms). Smart contracts are designed in open source, which makes it vulnerable to reading the codes by hack geniuses.
This is why it is important, even essential, to go through audits to check the solidity of the code. Harvest Finance has received two audits from Haechi labs and Peckshield which have approved security.
You should always check the protocol every time you want to deposit funds.
Similarly, there is an element that you need to consider called “impermanent loss.”
Finally, there is also the problem of whales who can move the markets quickly and suddenly because they have large amounts of money.
The big Harvest Finance hack
As we saw above, on October 26, 2020, there was a super fast attack by a super smart hacker. The hack lasted a total of 7 minutes. 7 minutes to harvest yes, but harvesting other people's products, a whopping $34 million. This is what caused the FARM token to fall. The platform reacted very quickly in all cases.
They communicated very quickly on Twitter in particular. For example, they publicly published and displayed the BTC addresses where the stolen BTC had been sent. Thus, they asked almost all exchange platforms to freeze these addresses.
Well, this is part of the very experimentation of Yield Farming protocols and DeFi in general. Security vulnerabilities are always being improved and hacks are becoming more and more difficult.
Final word on Harvest finance
Of course, protocols are all the rage lately and protocols like Harvest Finance are proving very interesting. This saves time and maximizes profits. Afterwards, it is true that the hack that the platform experienced had a negative impact…
In fact, it seems that protocols are also protocols that are victims of fashion effects. There is such enthusiasm for these new protocols like PancakeSwap and for novelty in general, that certain projects are as if drowned in the mass.
So, perhaps the best platforms are not as visible as the less serious ones….
Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since XNUMX and was Dean of the Department of Fine Art from XNUMX-XNUMX. In XNUMX–XNUMX she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.
**Disclaimer: This is an article about how to use Harvest Finance. Using these protocols carries different risks. Zonebitcoin does not provide investment or financial advice of any kind. This is information and you should be responsible for the decisions you make**
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