In order to provide incentives to yield farmers using the Harvest platform, the
$FARMtoken was released when Harvest Finance launched on September 1st, 2020. The token was bootstrap launched without any premining, presale, venture capitalist, or investor funds, with 0 circulating supply at launch.
A key innovation of the
$FARMtoken is that it entitles holders to a performance fee taken from Harvest's yield farming strategies. While each strategy may farm different assets, the performance fee is used to fund the Harvest treasury and to buy
$FARMon the open market, which is then distributed to those who stake
$FARMin the Profit Sharing pool. The price of
$FARMis potentially subject to consistent buy pressure as a result. Moreover, when staking, your FARM token is automatically compounded upon every interaction with the Profit Sharing pool. Directly speaking, the potential value of $FARM comes from any profits generated in the various deployed strategies.
Newly minted tokens are released weekly and distributed as follows:
- 70% of the FARM tokens will be utilized as rewards for liquidity providers, liquidity provisioning on decentralized marketplaces, market making services and for the creation & on-going maintenance of any deployed strategies, including community builder pay (AP Points). FARM tokens emitted that are not earmarked for rewards emissions are held in the Strategic Reserve wallet to be utilized as specified above. New emissions details are released weekly on the Medium blog or official Twitter account.
- 10% of the FARM tokens will vest to the Operational Treasury to pay for core team salaries, community contributor rewards and business operation expenses, including any legal fees to support Harvest operations and/or its contributors.
The specific weekly distribution of incentives is handled by the community contributor team with the goal of providing the greatest benefit to FARM holders.
In Week 5, FARM holders voted overwhelmingly to cap the maximum supply to 690,420 tokens by reducing the emissions of tokens by 4.45% every week until week 208 (27 August 2024) which is exactly 4 years from launch. As a result, token emissions are currently set to follow this curve:
$FARMwas launched with a hard-coded maximum supply of 5,000,000 tokens which would be minted over the course of 4 years.
In this initial period, it was noted that emissions were higher than needed for the growth of the project. As a result, a total of 14,850.108
$FARMtokens were burned irretrievably to 0xffffffffffffffffffffffffffffffffffffffff to decrease the total circulating supply.
The FARM token was also used to determine voting power in Harvest governance proposals when originally launched. The snapshot governance page can be found here: https://snapshot.page/#/farm.
Today the Harvest protocol has moved away from formal voting and instead comes to consensus through contributor proposal and discussion. The FARM token does not give holders a vote on incentive distribution, strategy deployment/updates, addition/removal of vaults, etc. When voting is utilized, it is used for higher order strategic decisions, such as the above mentioned supply reduction.