The native token of the yield farming protocol Harvest Finance, FARM, has caught the attention of traders across the U.S. In an astonishing display of market dynamics, the token’s price has skyrocketed to $88, marking an 80% increase within just 24 hours.
The Frenzy Behind the Numbers
As of the latest updates, FARM boasted a 24-hour trading volume of $218 million, an increase of approximately 19,000% from the previous day. This surge propelled the token’s market capitalization to an impressive $60 million.
Harvest Finance operates by reallocating users’ funds across a variety of decentralized finance (defi) platforms to optimize returns. FAR’M, while originally based on the Ethereum blockchain, is also available for trading as a BEP-20 token on the BNB Smart Chain.
A Brief History of FARM
FARM made a memorable debut on September 2, 2020, reaching its all-time high on the very first day of trading, a phenomenon attributed to its initial zero circulating supply. CoinMarketCap records its peak price at $2,236. Despite varying accounts of the all-time high, the consensus is that FARM’s price experienced a significant decline in the weeks following its launch, aligning with the tail end of 2020’s “defi summer.”
The token witnessed another notable high of around $303 during the crypto bubble of 2021. However, the latter part of the year saw a downturn, exacerbated by a hack in October 2020 that siphoned $24 million from Harvest Finance, resulting in a 65% price plummet within an hour.
Supply Mechanics and Impact
In a strategic move to limit its maximum supply to 690,420 tokens, the Harvest Finance community voted to reduce token generation by 4.45% weekly until August 2024. Despite a rapidly increasing supply, from about 250,000 in October 2020 to approximately 456,000 by January 2021, this measure was anticipated to enhance FARM’s value through scarcity.
Harvest Finance continuously issues new tokens, with a significant portion allocated to liquidity providers and contributors to the platform’s asset management. Additionally, a portion of the tokens supports protocol development and funds a development pool, which compensates the protocol’s architects.
Looking Forward
The recent trading frenzy surrounding FARM token underscores the volatile and dynamic nature of the cryptocurrency market. As investors and enthusiasts watch closely, Harvest Finance’s innovative approach to yield farming continues to influence the defi landscape.
