Harvest Finance
An international cooperative of humble farmers pooling resources together in order to earn DeFi yields
All edits by Elena Mamonko
January 25, 2022
Who and When Created Harvest Finance?
Chad Farmer
Harvest Finance was created by anonymous DeFi devs who were inspired by Andre Cronje, the founder of Yearn.Finance, for his ability to create such useful DeFi infrastructure. Following his lead, the anon devs created Harvest as a competing protocol to Yearn.
The Harvest protocol launched in 2020 when it opened for deposits on Monday, Aug 31st, and launched its FARM rewards for incentive pools on Tuesday, Sep 1st.
In just two weeks after launch, Harvest.Finance grew its community to over 8,500 members and reached over $500,000,000 in total value locked (TVL).
And the growth didn’t stop there.In just two months after launch on October 21, Harvest Finance surpassed $1B in total value locked (TVL) in its protocol
The explosive growth and success of Harvest Finance were unprecedented at the time.
Harvest’s $FARM token has not all been minted yet.
What is the Farm Profit Sharing Pool?
Harvest Finance’s Profit Sharing Pool is a pool where humble farmers (users) can stake $FARM tokens to receive a portion of 30% of the profits generated by the LPs. The number of $FARM stakers receive from this pool is proportionate to their stake in the Profit Sharing Pool.
Where does the 30% come from?
While 70% of the profits made from Harvest’s automated yield-farming protocol are distributed to depositors, the other 30% of profits is used to buy $FARM tokens directly from the market en masse. These $FARM tokens are then distributed proportionally to stakers in the profit share pool.
The Profit Sharing Pool not only benefits $FARM stakers in the pool, it benefits every single $FARM token holder. This is because Harvest must buy $FARM en masse from the market and this buying pressure further reduces the available $FARM supply and pushes up the price as a result.
Moreover, in addition to funding the Profit Sharing Pool with 30% of the profits generated by LPs, the pool also receives weekly $FARM emissions from the total supply of 690,420.
What are fTokens Used For?
fTokens, tokens with an “f” in front of them like fDAI, fUSDC, and fWBTC are the yield-bearing versions of these assets which are being automatically farmed by the harvest algorithm. These tokens automatically appreciate and can be redeemed for their real, underlying asset (ie. DAI, USDC, WBTC, etc) at any time.
How is Harvest Finance Governed?
Harvest Governance Proposals
The day-to-day running of Harvest Finance is run by Harvest devs. The devs make important decisions on things like incentive distribution, strategy deployment/updates, addition/removal of vaults, etc. There is no pure form of a DAO yet.
However, Harvest’s governance isn’t solely run by devs. The Harvest community of $FARM token holders has a voice and voting power for various higher-order strategic decisions. All Harvest governance polls in which $FARM token holders can participate can be found here
Some Harvest governance proposals in which $FARM token holders have participated include:
- The restructuring of the emission schedule
- The decision to issue GRAIN as reparations after the October 2020 exploit
- The decision on the percentage of GRAIN buyback program
- Harvest grants for the Ethereum ecosystem
- More
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