What Is Harvest Finance (FARM) – All You Need To Know – On its first day of trading, September 2, 2020, FARM reached its all-time high, which is likely because it debuted with a circulating quantity of 0 tokens, and a few coins that got into circulation quickly after that rocketed to high prices.
The cryptocurrency price aggregator CoinGecko places an all-time high for FARM’s price at $5,078, while CoinMarketCap and Messari place it at $2,236 and $2,911, respectively.
All aggregators agree, however, that the price of FARM plummeted to approximately $78 just a few weeks after it was released, just as the “DeFi summer” of 2020 was coming to a close.
This is even though data providers disagree on the all-time high.
The token’s value increased once more during the crypto boom of 2021, reaching a high of approximately $410 in February of that year.
As a result of the market meltdown that occurred in the spring, FARM also saw a decline. In June of 2021, the cryptocurrency reached its all-time low of $43.61.
FARM reached an all-time high of approximately $303 during the second wave of the crypto bubble in 2021. The decline in FARM’s value began at the end of the year when the second wave began to level off.
The situation became even more precarious when a hacker in October 2020 stole $24 million from Harvest Finance, which resulted in FARM falling by 65% in one hour. The downward trend continued into the year 2022. By May of 2022, the price of FARM had reached a record low of $33.35.
The protocol predetermined a maximum quantity of 5 million tokens at all times. Holders voted in the fifth week after it went live to put a cap on the supply at 690,420 by reducing the number of tokens that the protocol minted by 4.45% each week until the end of August 2024. This will continue until the cap is reached.
Still, Messari says the FARM supply is growing rapidly over time. It went from approximately 250,000 FARM in October 2020 to approximately 456,000 FARM in January 2021, and as a result, the project’s market capitalization hit its all-time high much later than the price of any individual FARM token; the market cap peaked at $194 million in February 2021.
New tokens are minted and distributed weekly by Harvest Finance. The new tokens are distributed as follows:
- 70% go to those who provide liquidity to Harvest Finance and capital for the company’s asset management strategies.
- 10% go toward the development of the protocol.
- 20% are held in a development fund, from which they are occasionally sold through the cryptocurrency mixer Tornado Cash to pay the coders who build it.
The Definition of Harvest Finance
Users can receive a dividend on their cryptocurrency investments through the usage of the decentralized finance (DeFi) protocol known as Harvest Finance (FARM), which was created on the Ethereum (ETH) blockchain.
The platform allows users to deposit their crypto assets into different lending pools. These pools are then used to provide liquidity to borrowers looking for loans from the protocol.
The protocol includes not one but two different loan pools: one that pays interest and another that serves as a savings pool.
The savings pool enables users to accumulate rewards for contributing liquidity to the platform, while the interest-bearing pool enables users to earn interest on their deposited funds. Both pools are accessible through the platform.
In addition, Harvest Finance provides its customers with a tool known as a flash loan, which enables customers to borrow money against the funds they have already placed without having first to secure the loan with collateral.
For users to access the Harvest Finance system, they need to initially place their cryptocurrency holdings within a lending pool of their choosing.
After they have contributed funds, they will start earning interest or prizes according to the parameters of the particular pool into which they have been placed. When they are ready to withdraw their funds, they are free to do so at any time and need not be concerned about forfeiting any of the interest or prizes that have been accumulated.
The protocol for Harvest Finance was developed to be user-friendly and open to anyone interested in using it. The platform’s user interface is easy to browse, and the documentation is organized clearly and concisely. In addition, the protocol provides users with a wide array of features and opportunities for customization, which makes it an appealing choice for users of all expertise levels.
The Harvest Finance protocol offers several benefits, which are among the reasons why cryptocurrency investors may find it an attractive choice. The fact that the protocol is decentralized in the first place implies that it is not beholden to the whims of any one particular authority figure. Because of this, it is significantly less susceptible to censorship and manipulation than platforms with centralized control.
In addition, the protocol provides a very high level of security and dependability. The platform encrypts all of the data it stores, and it is built on top of Ethereum, which is widely regarded as the most secure blockchain network available today.
Lastly, the scalability of the Harvest Finance protocol has been carefully considered throughout its development. The platform’s architecture is designed so that it can be easily integrated with the architecture of other protocols and platforms. As a result, the platform can handle many transactions without any problems.
An overview of the history of Harvest Finance
The very first announcement regarding Harvest Finance was made in July 2020. The project’s purpose is to create a decentralized platform that allows users to manage their digital assets in a risk-free and protected environment.
The people working on Harvest Finance have a wealth of experience in the fields of blockchain technology and digital asset management.
The CEO of Binance, Changpeng Zhao, was the one who initially made a veiled reference to the initiative in a blog post. In the post, he stated that the team behind Harvest Finance had approached him about listing the FARM token on Binance. He said that the team was interested in listing the token.
During that period, the group was still engaged in developing the platform, which had not yet been released to the public.
The official launch of Harvest Finance’s platform took place in September of the year 2020. The launch was at the same time the FARM token was made available.
Users can participate in the staking and farming process to receive rewards, which are powered by the token, which is also used to power the platform.
The network became one of the most well-known DeFi protocols on Ethereum and soon after garnered a lot of traction with its user base.
According to the data provided by DeFi Pulse in November 2020, Harvest Finance was the second most used DeFi protocol.
The number of people using and becoming familiar with Harvest Finance has been steadily rising. The team has improved the platform by adding new features and connectors.
Toward the end of the year 2020, Harvest Finance completed its integration with Yearn. Finance (YFI) a prominent DeFi protocol. Users are given the ability to earn incentives while trading across different assets, thanks to this connection.
Over one billion dollars worth of value was stored on the Harvest Finance platform as of January 2021, making it one of the most popular decentralized finance (DeFi) protocols in the Ethereum ecosystem.
Additionally, the project has been active in broadening its scope to include additional blockchains. Harvest Finance announced the launch of a cross-chain version of its platform on Polkadot in December 2020.
When it comes to the future, the group of people behind Harvest Finance intends to continue developing the platform and increasing the number of people who use it.
Already having amassed a sizeable fanbase, the endeavor is well on its way to establishing itself as a formidable competitor in the DeFi industry.
How Harvest Finance Works
The “vaults” of Harvest Finance are the most important part of the company. Smart contracts are known as vaults, and they can store deposited assets and carry out yield-generating strategies on behalf of their users. As of the year 2022, there are more than thirty distinct vaults may be accessed via the protocol, each with its own individual method.
Users can begin earning yield on any ERC20 token they put into a vault immediately after making the deposit. The protocol relies on a network of “oracles” to monitor the prices of various assets and carry out trades according to those prices. Because of this, the vaults can automatically buy low and sell high, which results in gains for users without requiring additional labor on their part.
After that, the profits from each vault are dispersed to the depositors in proportion to the overall pool they hold. Users are provided with a stream of passive revenue by this system, which may be applied to the reduction of gas expenses or other Ethereum-based fees.
In the coming months, the Harvest Finance team intends to deploy several brand new features, such as staking pools, insurance products, and non-custodial wallets, among other things. The protocol is also working on migrating to the Polkadot network, which will enable it to make use of the scalability and interoperability features that Polkadot offers.
FARM Token
The Harvest Finance platform uses the FARM token, a governance token, in its operations. The future course of the protocol can be determined through staking and voting on various ideas using FARM. The more the amount of FARM you stake, the greater impact you have on the decisions that are made regarding the protocol.
The loan pool also makes use of FARM as collateral on occasion. Lenders can put FARM into the pool to earn interest on the tokens they have placed. FARM can be used as collateral by borrowers so that they can borrow other assets from the pool.
Bottom Line
Users are given the ability to automatically earn interest on their cryptocurrency holdings through the usage of the popular DeFi yield aggregator known as Harvest Finance (FARM). Users can connect their wallets to the Harvest smart contract and deposit funds into the pool via these connections. The program then uses AI to maximize users’ yields and optimize them for maximum return.
