I just realized that many of us still don’t understand much about the harvest. Finance, so l just want to enlighten us about the harvest.finance by dropping the post titled “harvest. Finance analysis, what you really need to know”.
In the post, l would like to discuss about what harvest. Finance is, how to use harvest, their farm token, some farming strategies, why we really need to use harvest, and lastly the risks associated with harvest. Let us start by looking at what harvest. Finance is.
My Understanding About Harvest.Finance
When we talk about harvest.finance, it is an automated yield farming protocol created for those of us looking to put our assets to work in high producing farming opportunities. Harvest is really best to those who can’t manage our decentralized finance (DeFi) positions 24/7 - which includes most of us.
If you’ve spent any time in DeFi, then you already know that manually moving funds around the various protocols takes a lot of time. Developing strategies and auditing positions takes time and the gas costs on the Ethereum network are high.
Harvest Finance seeks to help with all of this by automatically searching out the newest DeFi platforms with the highest yield. It then optimizes yield with the latest farming techniques. So, Harvest works best for those of us looking for a convenient way to harvest yield from the latest projects in DeFi. Hence the name, “Harvest.”
How To Use Harvest.Finance
To build your farm with harvest, you just need to follow these guidelines
· Visit their site at Harvest.Finance and connect your MetaMask wallet
· Find a supported asset like the USDC or any supported asset on your MetaMask wallet and verify the APY you will like to earn.
· Enter a specific amount to deposit or click on the Max buttom and deposit your supported token like the USDC.
· You will receive fUSDC tokens in your harvest finance wallet if you deposit the USDC.
· Now, start earning interest
Hopefully your balance will grow but beware of Impermanent Loss.
To Stake Your fUSDC and earn FARM tokens, implement the following
a) Enter an amount or choose Max.
b) Click “Stake” near the bottom of the page. When your wallet approves the transaction you’re done.
You can realized l’m taking about the ftokens at this point, let’s look at them too.
The fTokens
I know most of us are now wondering about these fTokens. Tokens with an “f” in front of them like fDAI, fUSDC, fWBTC are simply the yield-bearing versions of these popular, underlying assets. This means if you deposit USDC into your harvest wallet, it automatically appears as fUSDC. It is these fTokens that automatically appreciate and yields you the profit.
How Do l Unwrap My fTokens
Before you can unwrap fTokens like fDAI, fUSDC, and fUSDT, back to their underlying assets, DAI, USDC, and USDT, you must first withdraw from the staking rewards contracts.
· Put your balance of fTokens in your wallet.
· Navigate to https://harvest.finance/earn and connect your wallet.
· Click on the “Unstake & Claim” button to initiate the transaction.
· Wait for confirmation.
Now, let’s also look at their official token
The Harvest Token “FARM TOKEN”
FARM is Harvest’s governance token. FARM token holders not only get to vote on the future direction of the protocol, but they also receive incentives to provide liquidity. Moreover, they get to participate in profit sharing from yield farming revenue. Cashflows come from Assets Under Management while protocol profits keep incentives aligned for users to hold a stake and govern.
Users can either decide to swap their FARM tokens or use them to provide liquidity and earn fees. Capital is distributed as follows: 30% of the yield farming revenue will go to those who stake FARM, while the remaining 70% will be returned to users who provide capital.
But heyy, let me also say some thing about their smart contracts
Let’s See Something About The Smart Contracts Of Harvest
Harvest smart contracts are open source and are designed from the ground up. They are not forks of existing contracts. Harvest has made the effort to reassure its users that their smart contracts have undergone extensive test coverage. Haechi Labs and Peckshield conduct their security audits. The team also states that additional audits are in progress.
However, they still advise users to personally review the smart contracts before depositing funds. That’s because all DeFi protocols have an element of risk.
Since we now know that there are some elements of risks involved in Harvest, let’s also look at that.
The Common Risks Involved In Harvest Finance
Harvest has similar risks to other DeFi protocols. These include such things as smart contract bugs, stablecoins becoming unpegged, and correlation risks. If one prominent block fails, it could cause others to tumble.
But the two immediate risks that Harvest users face is that of impermanent loss and what could be called the “Whale Factor.” .
As far as the Whale Factor goes, Whales are the big traders who can move markets in a single bound with their large trades. Whale movements pose a bigger risk to protocols like Harvest because their large investments and withdrawals can significantly alter the APY associated with the rewards.
Impermanent loss also happens when the price of your tokens changes compared to when you deposited them in the pool. The larger the change is, the bigger the loss.
Conclusion
Please l’m just a petty trader in farm and l would like you to do some homework before taking any action on the project. Since there are also risks involved, let’s try to follow the golden rule of investment by investing what we can really afford to lose.
Thanks a lot for reading!!!!.
My Regards to everybody