Decentralized finance (DeFi) platform Harvest Finance’s FARM token has witnessed a significant increase in its price — close to more than 160% after it got listed on Coinbase and Coinbase Pro in July.
Accordingly, Coinbase users can now seamlessly buy, sell, and trade FARM tokens on the exchange.
This begs the question, what exactly is Harvest Finance and what could the future hold for its native FARM token?
In this article, we take a deep dive into the technical architecture of this DeFi protocol, explaining the plethora of features and offerings it offers to users to earn yields on their digital assets.
What is Harvest Finance?
Before we get into Harvest Finance, it is important to first understand what an automated yield farming protocol is. Simply put, DeFi yield farming protocols are aimed toward generating the highest and best possible yields for investors seeking to farm yields on their crypto assets.
For example, Yearn Finance (YFI) was one of the first projects in the DeFi yield maximization landscape.
Infamously enough, moving digital assets on the Ethereum blockchain has, of late, become an expensive phenomenon due to the high gas costs. Due to this, it might sometimes be economically unviable for small and medium investors to continually move their funds across DeFi yield farming protocols due to the skewed risk-reward ratio.
Enter Harvest Finance
Harvest Finance is an Ethereum-based DeFi automated yield farming protocol or a yield optimizer that tries to automatically search for the latest DeFi platforms with the highest yield.
Once selected, the protocol then optimizes yield with the latest and sophisticated farming techniques to ensure the holder of the digital asset farms yield in the most capital-efficient manner. The protocol’s native token, FARM can be used for staking and yield farming on Harvest Finance.
As of today, Harvest Finance boasts of more than 100 different farms or liquidity pools where the protocol leverages its yield farming techniques to automatically farm-fresh yields.
To date, Harvest Finance has saved a staggering $50 million for its users in gas costs through its robust yield farming techniques.
Harvest Finance Tokenomics
The Harvest Finance protocol comprises three major platform tokens, FARM, iFARM, and bFARM.
While FARM is a cashflow token for Harvest Finance and can be traded on DeFi protocol Bancor where it currently enjoys more than $10 million worth of liquidity in the FARM/BNT liquidity pool.
iFARM is the yield-bearing token for Harvest that can be acquired by depositing FARM tokens on Harvest Finance protocol.
Similarly, bFARM is also a yield-bearing token but on the Binance Smart Chain.
The FARM token has a maximum supply of 690,420 and at the time of writing, trades at $250 with a market cap of more than $151 million, according to data on CoinGecko.
It is worthy of note that Harvest Finance was completely bootstrapped with no VCs or pre-mine which means that risks associated with price crash due to VC token unlock is almost negligible.
Holding FARM ensures several benefits for the holder as it essentially functions as a cash flow token for the Harvest Finance protocol. Out of the total yield generated by the protocol, 70% is used to increase the value of deposits while the rest of the 30% is converted into FARM tokens.
As you might infer, the conversion of fees generated through yields into FARM exerts an upward price pressure on the token which subsequently leads to its price appreciation.
Audits, Exchange Support, and Governance
As far as security is concerned, Harvest Finance smart contracts are completely open-source and are designed from scratch.
Harvest Finance has been successfully audited by leading blockchain auditing firms such as Haechi Audit, Least Authority, CertiK, and PeckShield. You can access all Harvest Finance smart contracts here and all audit reports here.
In terms of exchange support, Harvest Finance’s FARM token also enjoys support from all leading decentralized and centralized exchange platforms including Uniswap, 1inch Network, Binance, Bancor, and most recently, Coinbase.
Being a proof-of-stake network, Harvest Finance is governed by FARM token holders and all protocol proposals must go through an approval before they are implemented across the platform. Governance decisions are mostly along the lines of introducing new yield farming strategies, altering user interface, protocol improvement proposals, and the like.
To conclude, FARM’s listing on Coinbase indicates the level of trust Harvest Finance enjoys not only within the DeFi ecosystem but also among regulations-compliant centralized exchanges.
The FARM token currently trades at $250 and has an all-time-high value of more than $5,000, indicating the tremendous room for growth for FARM should Harvest Finance continue to flourish as an innovative and reliable DeFi yield farming protocol.