Strategies

Yield farming strategies are like different recipes for baking a cake - there are countless variations, each with its own ingredients and techniques. Some common strategies include providing liquidity to decentralized finance (DeFi) platforms, staking tokens in governance protocols, or participating in liquidity mining programs. It's all about finding the right combination of risk, reward, and opportunity that aligns with your financial goals and risk tolerance. Just like in cooking, experimentation and a pinch of caution can lead to some tasty results!

Strategies are a set of smart contracts created to distribute user funds into farms i.e liquidity pools, to generate the yield that Harvest compounds. Once the rewards collected by the strategy contract reaches a certain threshold enabling Harvest to reinvest them effectively, the strategy initiates the compounding process. This involves automatically claiming the rewards, exchanging them for the original assets, and then redepositing them back into the liquidity pool and farm.

These strategies undergo a thorough vetting process, including code review, security review, and testing. This process is crucial to ensure safety and prevent potential manipulation, especially since these strategies interact with external protocols as components of the vaults. Additional functionalities are implemented to address and manage these risks effectively. Strategies are equipped with the capability to withdraw all funds from third-party contracts and securely hold them within the strategy. Moreover, they have the ability to pause all functions of the contract if needed.