Harvest Finance Tokenomics

$FARM is the cashflow and governance token of Harvest.

A key innovation of the $FARM token is that it entitles holders to a performance fee (currently 30%) taken from Harvest’s yield farming strategies.

While each strategy may farm different assets, the perfomance fee is used to buy $FARM on the open market, which is then distributed to those who stake $FARM in the Profit Sharing pool. The price of $FARM is subject to a consistant buy pressure as a result.

Thanks for putting this together. Here is a slightly expanded summary for Harvest that I posted in Discord.

  • The governance side is not applicable since it isn’t a DAO. Lots of community involvement and collaboration, but it is not a governance/voting token in the same sense as most DAOs. Holders of FARM vote on strategic decisions such as emissions schedule, investments, and community proposals, but many of the core operations and decisions are made by the core dev team.
  • It is really a cashflow token. Depending on the strategy, you get FARM rewards and in turn can stake your FARM tokens in the Profit Sharing pool. By staking you get a share of the 30% that the protocol generates.
  • In February, they tokenized the staking in the profit sharing vault so when you stake your FARM, you get iFARM. This is essentially a receipt for your staked FARM and the value grows over time based on the value or your initial farm deposit + rewards for staking.
  • By tokenizing this position, it created more flexibility for efficient use of capital (borrow against it), transferability, and future or creative options. (one example is leveraging future yield though a project like APWine)