Harvest Expands to Arbitrum, Launching Beta Dapp ft. Dolomite
We’re excited to announce that Harvest on Arbitrum is now live thanks to our collaboration with Dolomite.
As of today, anyone can start using Harvest on Arbitrum via the interface provided by Dolomite at harvest.dolomite.io
With over 55% TVL market share and instant transaction confirmations, Arbitrum has positioned itself as the next promising Layer 2 solution to broaden our operations.
Keeping in mind that Harvest is purely community-driven, our friends & long-term community members at Dolomite received a grant this year from Harvest to develop yield farming opportunities on Arbitrum.
🚜 Launch Details
Harvest on Arbitrum is split into two phases throughout 2022.
The current interface at harvest.dolomite.io is a temporary UI before migrating it over to Harvest.
The reasons behind this temporary solution are threefold:
1. Harvest is meticulous when it comes to new farmlands. We take time to stress-test every possible scenario and make sure operations are economically sustainable in the long run.
2. Given that the works on the new Harvest Dapp have just begun, Dolomite’s UI for Arbitrum is expected to merge only once the new Dapp is fully deployed at Harvest.
3. Aside from the Arbitrum rollout, Dolomite aims to include its tech to power leveraged farms 📈. The later part of phase 1 will see simplified leveraged vaults on Harvest’s subdomain of Dolomite first.
These vaults work similarly to the ones you’re used to on Harvest, but with a couple of twists.
Mainly, yields are increased by the amount of leverage that’s available to the vault, minus any borrowing costs. Secondly, simplified leveraged yield farming makes earning yield on hard-to-earn assets much easier.
Through a delta-neutral folding strategy, Harvest on Arbitrum will be able to offer single-staked vaults, like LINK, that source their yield from borrowing stables or other assets at target collateralization levels and converting excess tokens that are generated to LINK. Through excessive capital efficiency, these strategies will allow previous hard-to-earn assets more lucrative than ever.
Expected to be released in Q3 2022, the new Harvest Dapp will come with an Arbitrum section natively integrated. Users who previously deployed assets via Dolomite’s subdomain won’t have to migrate any positions over to Harvest as both interfaces read the same on-chain data.
Moreover, leveraged farms will also be a part of the main Harvest Dapp, which function the same way as the current ones on the surface. Thanks to Dolomite tech, the magic of leveraged yield farming will be happening entirely under the hood.
Extra Phase 📈
Beyond the release of simplified leveraged vaults, the Dolomite team aims to offer more hedged strategies and a custom engine that allows users to add leverage to any supported vault and strategy on Harvest Arbitrum.
This will enable users to experiment with never-before-executed strategies while keeping gas fees low for users. Users will be able to pick which assets they’d like to borrow and Dolomite’s smart router will efficiently transform the borrowed assets into the vault tokens you need to earn that sweet, sweet yield.
Our teams will work towards deploying the first two phases in 2022, but since the ‘extra phase’ is still in the experimental stage, we don’t want to commit ourselves to delivering that in any specific time frame.
🤝 Collaboration Details
The collaboration with Dolomite brought new efforts toward sustainability. With this release, we are introducing a new fee breakdown for how Harvest works on Arbitrum. Of the yield generated, 75% is redirected to vaults for compounding (the Harvest APYs on the website reflect this already). The other 25% is broken down into 3 categories.
Firstly, the iFARM stakers will receive 15% of the 25% of the fees (which represents 60% of all fees generated). Secondly, the strategist, which is the entity that created the strategy, will receive 5% of the fees (representing 20%). Lastly, the platform developers that help deploy the strategy, integrate it into the existing system, and have to create the frontend & stats changes, receive the final 5%.
Until the Harvest core team integrates the Arbitrum UI into the main Harvest Finance site, Dolomite will receive the platform fee. Thereafter Harvest Finance will receive the platform fee, and whoever creates the strategies can earn the 5% fee. Meaning, for the first time ever, any developer can simply submit a functioning strategy in exchange for performance fees that are tied directly to the vault!
During this time period and beyond, the Dolomite team aims to bring new strategies to Harvest and will work closely with the Harvest team, even after Harvest takes the reins on the system, to continuously push new strategies with and without leverage.
All announcements and main communication about this collaboration will be handled via Harvest’s social channels, Discord/Twitter/Medium.com, and will be cross-promoted by the Dolomite team as well.
Safety Procedures Are in Place
The Harvest smart contracts that were deployed on Arbitrum made a few optimizations to Harvest’s Ethereum mainnet contracts, but the core, which was audited, remains largely the same. Meaning, Harvest’s Arbitrum smart contracts have not been explicitly audited! The changes from Ethereum mainnet generally include:
- Creating a universal liquidation scheme that is shared amongst all strategies. This allows the system to standardize how tokens are liquidated into target tokens and reduces the complexity of creating strategies. This also allows the DAO operators to easily modify the path for selling tokens if better venues appear over time for liquidations.
- Introducing a strategist and platform fee, which is taken in addition to the profit-sharing fee. At the time of writing, the strategist and platform fees are 5% of compounded yield (totalling 10%). The strategist fee is paid to the creator of strategies in order to incentivize a decentralized collective to produce lucrative strategies for Harvest. The platform fee is paid back to the core developers of the protocol to ensure the DAO has the funds necessary to operate without selling FARM.
- Using the Controller smart contract as a registry, where strategies read as much state as possible from this smart contract (like the implementation time delay). This allows the DAO to change Harvest’s parameters in one place to effectuate change throughout the whole system.
- Transforming the vault interface to also support ERC-4626.
In order to prevent hackers from hijacking the team’s wallets and corrupting the system or stealing funds, the control of the system is behind a 2 of 3 multi-signature smart contract. Meaning, two signers are needed to make protocol changes, like deploying new vaults and strategies, upgrading existing strategies, and more.
Moreover, all user-facing admin changes that could put users’ funds at risk are locked behind a 12-hour time delay (at the time of writing). To see the most up-to-date time delay, click here and convert the number under nextImplementationDelay from seconds to hours or days.
Dolomite is a DEX margin trading and composable lending protocol launching soon on Arbitrum. Dolomite will offer desktop and mobile traders spot and margin trading on a broad range of assets as well as substantial capital efficiency for liquidity providers to earn more on their deployed capital.
Arbitrum’s architecture uses Optimistic Rollups to bundle all transactions done on the Arbitrum chain, and subsequently posts it on Ethereum. Arbitrum is an optimistic rollup which enables anyone to verify that transactions on Arbitrum are not fraudulent before they are posted on Ethereum through interactive proving. Interactive proving is a method that allows a dispute between two parties, the proposer and the challenger, to solve their dispute off-chain so that it’s more efficient & not as costly to post on Ethereum.
Harvest is an asset management platform that maximizes yield for assets deposited by users. Harvest reduces gas costs and develops cutting-edge strategies to become the one-stop shop of yield farming in DeFi.