Stim Farms
v2 Farms with high APR for LP delivery.
Users deposit Liquidity (LP) tokens into Stim Farms during a 24 hour window. After the window expires, rewards vest for 1 week. At the end of the week, CZF is distributed to the depositors equal to the value of the LP plus a high APR. The amount of CZF is fixed at the start of the 24 hour window and all LP is delivered to the CZodiac protocol.
Stim Farms are a v2 Farming system inspired but not forked from Olympus Dao (OHM).

Why v2 Farming

All defi projects, including the largest, are plagued by toxic LP. Unstable LP creates a giant risk to holders of a protocols tokens. Additionally, rewards are paid out to this LP that has no plans to stay in the long term and will exit at the first sign of danger. Toxic LP has caused the majority of Defi projects to underperform Ethereum and BNB.
Stim Farms, like other types of v2 farms, prevent this issue by deliviering LP to the protocol permanently. Since the protocol will not dump LP on itself, the only risk is normal sales of tokens rather than a crisis event triggering toxic LP to exit forcing the community members to exit as well to protect their capital. Stim Farms provide confidence to CZF token holders and pool stakers that the liquidity isn't going to disappear.

Rewards

Unlike v1 farms, Stim Farms pay out rewards once on the LP. The CZF payout is fixed at the beginning of the 24 hour deposit window and claimable by depositors after 1 week. Each Stim Farm thus has a temporary duration.
The CZF reward has two components. First is CZF equal to the underlying value of the LP at the time the Stim Farm was deployed. Second is 1 week of CZF interest at a high APR. Both parts of the CZF reward are combined into a fixed value when the Stim Farm is launched. So the final value received at the end of the 1 week vesting can be higher or lower depending on fluctuations in CZF price.

Farming Strategies

The two most popular v2 Farming strategies are "Refarming" and "Pooling"
In the Refarming strategy, the farmer begins with depositing LP into the v2 farm. After collecting the CZF after 7 days, they sell half the CZF and reinvest the LP into a v1 farm. Once a new v2 farm arrives, the farmer deposits into the new farm and repeats the process. Refarmers are not necessarily "long" CZF since they are primarily holding LP and not CZF. The primary risk with the Refarming strategy is CZF price declines during the 7 day period.
For the Pooling strategy, the farmer also begins with depositing LP into the Stim Farm. After waiting 1 week and collecting the CZF rewards, the farmer deposits the CZF into v1 Pools. The tokens earned from these pools can be reinvested back into other pools or may be combined with CZF to create new LP for new Stim Farms. Unlike Refarming, Poolers are "long" CZF and expect the price to increase over time. However they do not have price risks from the 7 day vesting as their time horizon for CZF is much longer.
Last modified 6d ago