[Harvest Finance] LTIPP Application Draft

SECTION 1: APPLICANT INFORMATION

Applicant Name: Absolute Unit

Project Name: Harvest Finance

Project Description: Harvest is one of the first Yield Aggregators launched in DeFi Summer 2020 with a vibrant community. We help users discover new platforms and opportunities and earn yield, all through a focused, streamlined experience.

Team Members and Roles: Redmption: Project Lead | Absolute Unit: BD Lead | Just Z: Social Lead | JasperS13: Dev Lead | Gruad: Treasury Lead | YogaFire: Community Lead

Project Links: https://www.harvest.finance/ | https://docs.harvest.finance/ | https://twitter.com/harvest_finance | Harvest Finance · GitHub

Contact Information

Point of Contact: abababab

Point of Contact’s TG handle: @absoluteunitt

Twitter: https://twitter.com/AbsoluteUknit

Email: absoluteunit@proton.me

Do you acknowledge that your team will be subject to a KYC requirement?: yes

SECTION 2a: Team and Product Information

Team experience:

Harvest Finance is one of the original Yield Farming protocols launched in 2020 during DeFi Summer. It continues to thrive today by collaborating with numerous projects across Ethereum and its L2s, including Arbitrum, Polygon and Base. New strategies are often first to market compared to competitors, with new farms launched on a weekly to bi-weekly cadence. Harvest and its $FARM token was also the first fully anon project/token to be listed and supported by CoinBase, and soon, a CoinBase Learn initiative will be launched to teach new users about Harvest while giving them free FARM tokens to participate in the Harvest ecosystem. Harvest also prides itself on being 100% community-managed, with all contributors to the project sourced directly from those who participate in its ecosystem. Harvest’s team also includes a variety of contributors, ranging from people who have their doctorates in Economics to full stack devs and Aerospace Engineers.

In early Q2 2024, a fully revised UI will be launched, H4, which will simplify the yield farming process for all users while dramatically improving the visualization of key information points, including earning power and yield generated to date. Harvest Finance is a well-known product within the ecosystem, and its ability to weather bear markets and adapt to changing trends shows its commitment and staying power within DeFi.

What novelty or innovation does your product bring to Arbitrum?

Harvest has developed a number of novel products in the Yield Aggregator space. We also pride ourselves in working in a collaborative, positive way with various protocols. We were one of the first projects to build on top of UniV3 LPs. We also developed novel strategies for Solidly-style products that help reduce token sell pressure and increase user activation for their platforms.

A great example of this would be our Camelot Vaults, where farmed GRAIL isn’t just dumped into more underlying but deposited into our “fxGRAIL” vault that harvests dividends and directs incentives in the most profitable way for the user. Another great example would be our Lodestar HODL strategies. Where harvested LODE is deposited into our “fLODE” vault that performs similar actions to the fxGRAIL vault in the Lodestar ecosystem.

Is your project composable with other projects on Arbitrum? If so, please explain:

Yes, our vault tokens are ERC-4626 compliant, so they can be used in Lending Markets (and have been at different times in our existence), and with our status as a Yield Aggregator, we have to be composable.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?

Yes, Yearn, Beefy, etc.

How do you measure and think about retention internally? (metrics, target KPIs)

Category Relevant Metrics
General All general metrics in the OBL relevant metrics chart are relevant. These metrics include: Daily Active Users, Daily User Growth, Daily Transaction Count, Daily Protocol Fee, Daily Transaction Fees, Daily ARB expenditure & User Claims and Incentivised User List & Gini Coefficient.
Yield / Yield Aggregator All metrics for Yield in OBL relevant metrics are relevant. The metrics include the TVL of the incentivized pool, and the list of depositors. The list of depositors will contain information like LP addresses, their current liquidity in USD, time-weighted liquidity in USD, and the duration of liquidity provision.

Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan:

Yes

Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):

No

SECTION 2b: PROTOCOL DETAILS

Is the protocol native to Arbitrum?:

No, we initially deployed on Ethereum Mainnet in 2020. We launched on Arbitrum in 2023

On what other networks is the protocol deployed?:

Mainnet, Polygon, Base

What date did you deploy on Arbitrum mainnet?:

1 March 2023

Do you have a native token?:

Yes - FARM token | Harvest

Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?

We have always provided rewards to our vault users. As a fair launch token we wanted to distribute our native token to the users of our protocol.

Current Incentivization: How are you currently incentivizing your protocol?

In line with the emissions schedule outlined in the above doc.

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem-related program?

No

Protocol Performance:

Photo Credit: DeFiLlama

After launching on Arbitrum in March of 2023, we have seen steady growth in TVL and DAU. Some of our best-performing vaults have been those we’ve collaborated closely with other Arbitrum Ecosystem participants.

Below are some numbers from some of our best-performing vaults. They represent 10% of the WBTC market, 20% of the ETH market, 55% of the USDC.e market, and 27% of the USDC market on Lodestar.

Asset TVL 3mo Change APY
WBTC $1.12M +2,200% 25.60%
ETH $493,830 +2,700% 33.42%
USDCe $259,380 +6,100% 54.08%

Protocol Roadmap:

We have never operated off a roadmap, but upcoming dates/milestones include:

Harvest 4 is a major UX/UI revamp. Addition of new Leveraged Farm types. The addition of new strategies included but not limited to - cross-chain farming, individualized leverage farms, options-based farming, etc.

Audit History & Security Vendors:

We have had four audits completed by Haechi, Least Authority, Peckshield and CertiK. You can find detailed information and links to the audits themselves here - Audits | Harvest

Security Incidents:

At 02:53 UTC on Monday October 26th 2020, attackers launched an economic attack on the fUSDC and fUSDT vaults to drain a total of $24 million.

At around 03:30 UTC, users in the Harvest Finance Discord began noticing significant drops in their USDT and USDC balances in the respective vaults.

The Harvest dev team was immediately informed, and shortly after, All DAI, TUSD, renBTC, wBTC, and remaining USDC and USDT funds on Curve were withdrawn into the vaults pending investigation. Deposits into these pools were shortly disabled, while withdrawals were unaffected.

The attacker had repeatedly exploited the effects of impermanent loss of USDC and USDT inside the Y pool on Curve.fi. They used the manipulated asset value to deposit funds into the Harvest’s vaults and obtain vault shares for a beneficial price, and later exit the vault at a regular share price generating a profit.

SECTION 3: GRANT INFORMATION

Requested Grant Size:

250,000 ARB

Justification for the size of the grant 34:

Harvest currently maintains a large presence on Arbitrum through collaborative efforts with Camelot, Lodestar, Pendle and Dolomite. By receiving a grant, Harvest will reward protocol depositors who use Arbitrum-based farms and enhance their earning potential while receiving all the benefits of H4, including automated compounding of the farming strategy to achieve a true APY% rate of return. Issuance of ARB rewards will be based on depositor TVL within the farm and ensuring efficiency of its distribution for longevity and support of current and new projects launching on Arbitrum. The use of an ARB grant will focus on expanding the Arbitrum ecosystem, and partnering with projects that bring unique protocols to Abitrum, as opposed to simply ejecting rewards for the sake of drawing TVL.

We have also shown an ability to grow TVL from ARB rewards as shown by our TVL growth on Arbitrum during this last round of STIP rewards. We had in excess of +2,000%+ growth across multiple vaults with little to no marketing efforts outside of announcements. With an ARB grant we will be able to truly double down all of our efforts on our Arbitrum farms.

Grant Matching:

We will match the grant with funds from our HCF (Harvest Community Foundation) multisig, up to $400k in USD rewards. These rewards will be distributed to both iFARM stakers on Arbitrum and distributed to our vaults as outlined in the execution strategy

Grant Breakdown:

We will be allocating 65% of the grant towards single asset vaults with matching incentives. 35% will be allocated towards other strategy types.

Funding Address:

0x35C469919cAf33C24D4Ff2283057E761EaE6095a

Funding Address Characteristics:

This will be a multisig that will include Redmption, Absolute Unit, Just Z, Gruad, Yogafire and Jasper.

Treasury Address:

Harvest Community Foundation: 0xdf5845b9fd2ccbaaea048d9d083237942378ba46

Operations Wallet (Ethereum): 0xf49440c1f012d041802b25a73e5b0b9166a75c02

Operations Wallet (Polygon): 0x39cc360806b385c96969ce9ff26c23476017f652

Operations Wallet (Arbitrum): 0xf3d1a027e858976634f81b7c41b09a05a46eda21

Operations Wallet (Base): 0x218b1afc34ebf5c73950ada6f840cee134f2dc72

LP Wallet (Base): 0x97b3e5712cde7db13e939a188c8ca90db5b05131

Contract Address:

0x35C469919cAf33C24D4Ff2283057E761EaE6095a

SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES

Objectives:

  • Diversify our Strategies: Expand on our current strategy portfolio to provide more Arbitrum specific strategies.
  • Incentive Partner Vaults: Deploy targeted incentives towards our highest value partner vaults to bring additional TVL not just to Harvest but to our partner projects, such as Lodestar, Camelot, Penpie, etc.
  • Bring in Additonal Users: Drive user adoption through strategic incentivizes and marketing efforts to bring the most new users to our Arbitrum Vaults

Execution Strategy:

Incentives will be distributed first to our single asset vaults, starting with a linear amount to our six largest by TVL, we will continually adjust these to ensure we are providing the highest yield on single asset tokens across DeFi. We are targetting yields above 40% on all vaults - many of our single asset vaults are already operating above 30% APY. Especially for our WBTC vault this would be far and away the best single asset WBTC vault across DeFi -

  • WBTC (Lodestar) - Target: 30%+
  • ETH - Target: 35%+
  • USDCe - Target: 50%+
  • WBTC (Lodestar - HODL) - Target: 30%+
  • xGRAIL - 35%+
  • wstETH - 35%+

After a 2-3 week trial period we will then begin streaming rewards to LP’s (our top 3-4 vaults) and dual token vaults. Adjusting throughout the process to ensure rewards are being given fairly. At this point we will then expand reward streaming to further single asset vaults and explore any future strategies to deploy additional incentives to.

We are also planning to offer a claim option to the ARB claiming process that will offer users the ability to stake their ARB into a Harvest vault to further compound their rewards and create TVL stickiness.

Grant Timeline and Milestones:

Weeks 1-3: Deploy approximately 5% of incentives to our top six single asset vaults per week. And 2% of incentives to our iFARM staking pool. Where iFARM (auto compounding FARM that receives a portion of protocol revenue) will also be receiving ARB STIP rewards.

Weeks 4-12: Deploy incentives to our top LP vaults and further single asset vaults. Continually review and analyze data to ensure we are deploying incentives in the most efficient manner.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?

Harvest has shown time and again we are capable of creating first to market and novel strategies that are both collaborative for the partner protocols and lucrative to users. Increasing yield to these strategies will help bring additional eyes and encourage further collaboration / innovation within the yield aggregation space.

Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?

Yes

SECTION 5: Data and Reporting

OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 30. Along with this list, please answer the following:

Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?

Yes

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?

Yes

Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains.

Yes

Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?:

Yes

4 Likes

Hello @abababab ,

Thank you for your application! Your advisor will be SeedLatam Gov @SEEDGov

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

2 Likes

@abababab

1 Like

First and foremost, we would like to express our gratitude to Harvest Finance for submitting their proposal. We acknowledge their expertise in distributing incentives through the existing FARM token program. However, we have concerns about the inadequacy and lack of clarity in the protocol’s milestones, which has raised doubts about the commitment to implementing these promises. Despite being operational for a considerable period, the protocol’s TVL values are significantly below former levels, indicating decreased usage. Furthermore, we find the requested grant amount to be excessive, considering the expected impact on the Arbitrum network. Based on these considerations, ITU Blockchain has decided to vote Abstain

3 Likes

That’s more than fair! I will say our overall TVL is down since we launched on Mainnet 4 years ago but our Arbitrum and recent TVL is up considerably, as well as our partnership and other activity. However we do respect your decision to vote abstain and appreciate the feedback.

3 Likes