Strategies are a key component in the Harvest machinery that define the ways in which vault funds can invested.
Because strategies are responsible for directly moving user funds, they are strictly scrutinized and tested prior to their deployment. Strategies become associated with a vault through a 'timelock' mechanism, meaning that the change is first announced, then a period of time must elapse (currently 12 hours) before the change is made official and the new strategy can access funds.
While the specifics of each strategy may differ based on the investment opportunity being taken advantage of, all strategies use a function called doHardWork() to compound their interest with the following steps:
  1. 1.
    Collect reward tokens accumulated by the invested funds.
  2. 2.
    Liquidate the rewards into the invested token.
  3. 3.
    Invest recovered funds into the investment opportunity.
During liquidation, a fee (currently 30%) is taken from the rewards and used to buy FARM on the market, which is then distributed to those who have staked FARM in Profitshring.
Whenever doHardWork() is called, the price of each share of the associated vault increases. Most vaults are harvested every 12-48 hours, depending on the liquidity of their associated token. If you notice that a vault has failed to harvest in more than 48 hours, please let a mod know in the Harvest community discord server.
The following is an example of what this 'harvest' transaction via doHardWork() looks like: