Harvest Finance’s FARM Token Surges with $218 Million Trading Volume, Hits $60 Million Market Cap

Harvest Finance’s FARM Token Surges with $218 Million Trading Volume, Hits $60 Million Market Cap

Crypto News – At the time of this writing, FARM boasted a 24-hour trading volume of $218 million, marking an astonishing surge of 19000%. This recent flurry of activity left the token’s market cap at $60 million.

Harvest Finance stands as a yield farming protocol that strategically reallocates user funds across various DeFi platforms to yield returns. Native to the Ethereum blockchain, it’s also tradable as a BEP-20 token on the BNB Smart Chain.

FARM made its debut by reaching an all-time high on September 2, 2020. This surge could be attributed to its initial circulating supply of 0 tokens, which led to a frenzy when the few coins that entered circulation quickly skyrocketed in value. According to crypto price aggregator CoinMarketCap, FARM’s peak value was recorded at $2,236.

While there’s debate among data providers regarding the all-time high, it’s universally acknowledged that FARM’s price plummeted to around $78 a few weeks after its launch, coinciding with the end of the DeFi summer of 2020.

During the second wave of the 2021 crypto boom, FARM peaked at around $303. However, as the fervor of the second wave waned toward the year’s end, FARM’s value took a nosedive. Matters worsened following a hack in October 2020, where $24 million was siphoned from Harvest Finance, causing FARM to drop by 65% in just one hour. This downward spiral persisted into 2022, with FARM hitting a low of $33.35 by May of that year.

The protocol set a maximum supply cap of 5 million coins. In the fifth week post-launch, investors voted to reduce the supply to 690,420 by decreasing the number of tokens generated by 4.45% each week until the end of August 2024.

However, despite these efforts, the supply of FARM has been growing rapidly, escalating from around 250,000 in October 2020 to approximately 456,000 by January 2021. Consequently, the project’s market capitalization reached its zenith much later than the individual token price, peaking at $194 million in February 2021.

A capped maximum supply aligns with scarcity principles, potentially bolstering FARM’s value as demand evolves.

Harvest Finance issues new tokens weekly, with 70% allocated to liquidity providers and individuals contributing capital to the platform’s asset management strategies. Another 10% goes towards ongoing protocol development, while the remaining 20% is funneled into a development fund. Periodically, this fund is tapped into, with tokens being sold via the cryptocurrency mixer Tornado Cash to compensate the developers responsible for building the protocol.