Author: Marko Janev
Publication date: 10.04.2024
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The cryptocurrency market follows a renowned 4-year cycle. Where after every fourth year the main crypto of them all or simply Bitcoin is going through something called “Halving”. That is the concept that provides scarcity for a digital asset and thus makes it more valuable. Why are we telling you all of this? It is simply because the market is driven by Bitcoin and all of the other cryptos follow his lead. In 2024. Bitcoin is expected to go through halving 4th time in its history and it will make the whole crypto market rally.
That is when retail investors get very fearful or very greedy and look for opportunities to make so-called “100x returns”. Of course looking for smaller coins or “altcoins” with low price and market cap. But that is where you need to be very cautious and do your own research. One of the purposes of this article is to help you cover at least one crypto project among thousands of them and save you valuable time.
What is FARM coin?
FARM coin represents the native token of Harvest Finance which is yield farming protocol which is used to move user funds between different DeFi (decentralized platforms) in order to generate bigger returns.
It is made on Ethereum blockchain but it also trades on BNB Chain as a BEP-20 token.
What is Yield Farming?
Yield farming involves putting your tokens in a decentralized finance protocol’s liquidity pools in order to earn rewards in a form of protocol’s governance token. There are a couple of ways to yield-farm but usually it is done by either decentralized lending or trading pool to provide liquidity. Everyone who invests in these pools are considered to be liquidity providers ( better known as LPs ) ; they are entitled to earn annual percentage yield (APY).
DeFi protocols use yield farming to promote the use of their platforms and attract community to contribute liquidity, the bedrock of DeFi platforms. While it sounds compelling to earn money this way through a passive income it might not be always the greatest idea. Like we mentioned it is crucial to do your own research before investing in any project especially crypto projects.
Doing your own research
When researching altcoins you should put as much effort as possible to investigate and decide whether you should invest in it or not. So here we are going to provide you with a reliable strategy for doing so.
● Investigate what narratives are active then make a list of the coins you would like to explore based on a category of narratives you have chosen.
● Check the market activity such as daily trading volume and the exchanges the coin is listen on
● Do initial research by going on Youtube, Messari or Binance research and take notes of things you might find interesting or vague
● Search for the latest interviews of founders and other related individuals and also take a look at their LinkedIn profiles
● Dig through crypto's dedicated documentation and check for terms such as tokenomics, minting, ICO etc…
● Try and find it on blockchain explorer of a certain crypto such as Etherscan if it is ERC-20 token and see how are tokens allocated
● Check websites and blogs of projects and also social media to see how much is community involved
Investing in FARM coin
Investing in FARM coin is not as compelling and profitable as investing in similar cryptos from the same niche as FARM. Why is that? It is simply because it has a very high price
compared to other coins such as Arweave, Uniswap or PancakeSwap, but a very small market cap. While it is true that smaller market cap means higher potential for growth it does not guarantee that the crypto is going to go to the moon.
Project itself has social media that is relatively active which is usually a good sign. But on the other hand it doesn't have an updated blog, the posts are 8 months old and the milestones are nowhere to be found. Founders have stayed anonymous which is another red flag.
DeFi tokens pose the greatest threat in the eyes of traditional banking systems therefore they are always a risky asset to hold. Knowing that Ethereum could face regulatory scrutiny this year and that FARM is token based on its blockchain it might not be a good idea to get involved with Ethereum projects especially DeFi’s. Just remember what XRP had to go through. Farm token is avaialable for trading on Binance.
Conclusion
Like it was mentioned multiple times before investing in cryptocurrency it is necessary to do a thorough research, and invest money that you are ready to lose. If you are a trader that has a little more money on your hands then sure checking out this project would be a nice idea. But if you are not experienced nor do you have a lot of money investing in this project may pose a risk that outweighs the rewards like the most crypto investment does.
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