The fourth internal operation of FujiDAO is the harvesting function.
It allows for the users to optimize even more their costs, especially their collateral interest, which is increased by collecting the farmed assets from the base providers and swapped to the collateral asset to increase the overall health of the vault.
What is it?
In DeFi, harvesting tokens is sometimes required when a protocol distributes tokens to its users. In our case, FujiDAO received tokens from the base providers, Geist, Ironbank and Scream when one is selected as the active provider for a vault.
At FujiDAO, we decided to optimizes the collateral side of the users.
In fact, by harvesting and swapping back the farmed tokens for the collateral asset, Fuji increases the overall health of the vault and increase the collateral amount of each users.
Example: Vault FTM/USDC
The vault is refinanced across Geist, Scream and Ironbank, when borrowing, the vault accumulates the base provider token, here in our example is Geist.
When FujiDAO harvests, it swaps the Geist tokens back for the collateral FTM from the market and increase the overall health of the vault by depositing back the FTM inside.
Swap Geist for FTM
Deposit FTM in FTM/USDC vault
Reflect the collateral increased on the indexed tokens (ERC1155)
The distribution depends on your past behavior in this vault.