Hello fellow farmers,
Today, I’d like to present to you a vision of what Harvest could become. I think the project has immense potential and I’m eager to see it realized.
The rough outline I present to you today assumes the iFARM has been implemented. It’s built on top of it. People who are familiar with the DeFi space will understand all of it with the following sentence: AAVE + CRV tokonomics merged on top of iFARM.
Now let’s see how it looks like.
1 / Harvest’s Finance Safety Module
Just like Aave, Harvest launches a Safety Module, accepting both LP and iFARM tokens for deposits. Depositors will earn an extra set allocation of FARM tokens - but accept to serve as safety backstop. Up to 30% of the deposits can be seized in the event of a failure on Harvest to compensate for the losses.
2/ With a twist: timelock
Just like CRV on the CRV DAO, depositing in Harvest’s Safety Module will occur with a timelock - the longer you lock for, the more veFARM you - it’s a long-term bias in the distribution of rewards and voting power.
3/ Boost your Harvest vaults!
Just like on CRV, votelocking your iFARM/LP gives you veFARM enabling you to boost the FARM earnings of your positions on FARM. (only the FARM output, not the base yield obviously)
4/ BreadForThePeople → PeopleBakeTheBread
Finally, there could be a last layer of meta-game by enabling the community of veFARM holders to vote on the next week’ allocation of the FARM budget for each vault.
5/ There is no free ride: incentives are for bulls
Instead of the 50/50 FARM/ETH liquidity pool currently used on Uniswap, I’d recommend switching in favor of a 80% FARM / 20% ETH pool on Balancer. Considering this pool is incentivized twice (lp budget + sm budget) - there’s no reason to give free rides to people hedging their FARM exposure.
Instead, incentivizing this pool will reward bullish long-term FARM holders, willing to bet on the service for long periods of time. Moreover, if the price appreciates heavily, this 80/20 distribution is much more favorable for liquidity providers.
I want to keep this short so let me conclude.
Yes, it’s a mere fork and merge approach, however, the two tokonomics have proven their efficiency. It achieves the following:
- Better incentivization of the liquidity on FARM
- Potentially a massive native insurance module for the service
- Much more engagement of users/holders
- More dynamic allocation of FARM & better aligned with the community
- Paves the path for more decentralization