Trader Joe: An All-In-One DeFi Protocol on Avalanche Network

Trader Joe is a one-stop-shop Avalanche DeFi protocol where you could trade, provide liquidity, farm, lend and borrow.

Trader Joe: An All-In-One DeFi Protocol on Avalanche Network

Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
  • I do hold a long position in JOE as a token holder.

1A. What is Trader Joe?

Trader Joe is a one-stop-shop Avalanche DeFi platform where you could trade, provide liquidity, farm your LP tokens, stake your JOE tokens, lend, borrow and participate in IDO on this multi-purpose platfom itself.

Trader Joe achieves this by offering a suit of decentralized DeFi protocols, namely:

- Trader Joe Exchange (trading, liquiity mining, yield farming)
- Banker Joe (lending, borrowing)
- Rocket Joe (IDO)
- Trader Joe Moular Staking Pools (staking)

A. Modular Staking Pools

JOE token is Trader Joe's native governance token where its holders could use it to participate in modular staking on Trader Joe. JOE tokens could be earned by providing liquidity then yield farm your LP tokens, or buy it from
Trader Joe decentralized exchange/ centralized exchanges like Binance which list JOE.

Trader Joe uses modular staking pools model, where each staking pool offers different incentives. All JOE token holders could choose where to stake their JOE tokens according to their own needs and objectives.

Following are Trader Joe's current staking pools:
- sJOE pool
- rJOE pool
- veJOE pool
- xJOE pool (old pool that no longer accrues reward, for withdrawal only)

A.1. sJOE pool

sJOE pool allows token holders to stake their JOE tokens in exchange of USDC stablecoin. This stablecoin reward was earned from the swap fees, hence, for every swap that happens on Trader Joe exchange, a 0.05% fee
is charged and converted to USDC which is then distributed to sJOE pool every 24 hours.

By design, the amount of reward is dependent on Trader Joe's trade volume, as trade volume increases, so would the cut of the fees distributed to sJOE pool stakers.

Another part of the reward is coming from sJOE pool deposit fees. Staking on sJOE pool does come with a deposit fee which can scale up to 3% max, depending on the number of JOEs already staked. This deposit fee would then be shared with all existing sJOE pool stakers.

A.2. rJOE pool

rJOE pool allows token holders to stake their JOE tokens in exchange of a placement in Rocket Joe IDO participation (Rocket JOE launches). rJOE pool stakers would stake JOE tokens in exchange of rJOE tokens. rJOE has no value and is not transferrable.

rJOE tokens have an infinite amount of supply and would be burnt right after the tokens have been used in Rocket Joe launches. Unlike sJOE pool, depositing into rJOE pool does not incur deposit nor withdrawal fees, for
every 100 rJOE tokens accrued, users can unlock an allocation of 1 AVAX in the Rocket Joe launch events. The emission rate for rJOE is controlled by the protocol and may change to control the supply.

A.3. veJOE pool

veJOE pool is primarily designed for Trader Joe liquidity providers who also hold JOE tokens. Staking your JOE tokens in veJOE pool would boost your farming reward, allow you to earn more JOE at a rate that is higher than
what the LP is offering.

When veJOE token is claimed, a Boost APR would be applied to selected farms which marked with 'Boost' . Boost rewards given are directly proportional to the percentage share of JOE tokens which you have
staked in the veJOE pool. veJOE tokens are non-transferrable and cannot be sold.

Out of all Trader Joe staking pools, governance privilge is only given to veJOE holders who earned their veJOE tokens via veJOE pool staking. 1 veJOE token would give you 1 voting power.

CAUTION :

If you unstake any amount of JOE from veJOE, you lose would ALL accrued veJOE and ALL voting power

B. Trader Joe Exchange

Trader Joe Exchange is a decentralized exchange (DEX) that runs on Automated Market Making (AMM) protocol. All swaps that happen on Trader Joe would incur a 0.3% trading fee, where the fee would be distributed as follow:
- 0.25% to liquidity pools that pool liquidity from liquidity providers
- 0.05% to sJOE token farm (section A)

C. Banker Joe

Banker Joe is a decentralized lending protocol just like Compound Finance and Venus Protocol. Lenders could lend their digital assets to Banker Joe in exchange of a receipt token,jToken (e.g. lend AVAX in exchange of jAVAX).

AVAX tokens would acrrue lending interests earned from borrowers over time and whenever a lender wants to redeem his/ her digital assets, the jToken would be burnt in exchange of initial tokens supplied + interest earned from lending in the form of supplied tokens.

All users who lend/ borrow on Banker Joe would be rewarded with JOE tokens too as increased usage of Banker Joe would enhance the protocol itself.

D. Rocket Joe

Rocket Joe is an IDO platform where new tokens are being listed and issued first-hand here. Holders of rJOE tokens (refer to A.2. rJOE pool above on how you could earn rJOE tokens) could bid for placements in this IDO with their rJOE tokens.

Rocket Joe allows for fair price discovery during the deposit phase. Participants depositing their AVAX will be defining the price, in real-time. The more AVAX that gets deposited, the higher the Issuing Token price will be. This is because more AVAX is being paired against the Issuing Token.

1B. Trader Joe's Project Updates

  1. Trader Joe: Cultivation Club - $20k Bounty Program Initiative

    An initial sum of $20,000 USDC is now available to utilise for Community bounties . If a proposal is voted in by the Cultivation Club, the bounties will then be pushed live for Contribution . All rewards are decided and distributed by the Committee Panel, elected Community members .
  2. JOEPEG Marketplace Launch

    Trader Joe’s brand new NFT Marketplace will launch in early Q2.
  3. Launch of NFT Gaming Project- Battle of the Blockchains

    Trader Joe has partnered with Relay Chain, to bring the first bridge based on-chain NFT gaming project.
  4. Trader Joe's Partnership with Protection Protocol, Degis

    Trader Joe and Degis will explore the possibilities of providing full protection to Trader Joe users
  5. Trader Joe's Partnership with VALK to offer Merlin, a portfolio management tool

    Trader Joe has partnered with VALK to offer Merlin. Merlin is a highly accessible portfolio management tool, allowing deep analysis of transactional data. Users can check historic asset pricing, PnL for tokens, Total Gains/Losses including gas fees all on a user friendly dashboard.
  6. Trader Joe's Investment into Perpetual Futures Protocol, Hubble Exchange

    Trader Joe has announced an investment into Hubble Exchange, an innovative decentralized platform for trading perpetual futures, deployed exclusively on Avalanche

2. How Trader Joe Performs Relative to Other Cryptos ?



Performance of All DEX-Themed Cryptos Under Quantdoge’s Watchlist since 2021 (Sorted by % Return)

JOE has undergone 3,379.13% return from $0.0345 to $1.2003 since 01 Jan 2021. JOE is the best performing crypto asset among others here.

Performance of All DEX Cryptos Under Quantdoge’s Watchlist since 2021 (Sorted by % Change in Market Cap)

JOE is the best performing crypto assets by market cap growth among others here.

Judging from both performance measurements (Market Cap and Price), JOE has been growing tremendously since its inception last year.

3. Could JOE remains the fastest growing DEX-themed tokens going forward ?

Below images were taken from Token Terminal.

Chart 01: Circulating Market Cap vs Trading Volume

JOE's trading volume increased exponentially from Oct 2021 to late Dec 2021 (indicated by the convexity of trading volume curve), however, its growth started to slow down moving towards 2022 (identified by the concavity of trading volume curve from Jan 2022 onwards).

Chart 02: Circulating Market Cap vs Total Revenue

JOE's total revenue correlates with its total trading volume. Ultimately, JOE's revenue was mainly derived as 0.3% trading fees off the total volume traded. As JOE's trading volume slows, so is its revenue growth.

There would be less incentive for users to stake JOE tokens into the sJOE and veJOE pools if the revenue distributed per user decreases over time as shown in the graph below.

Chart 03: Revenue per Day

As the amount of tokens being supplied to Trader Joe's liquidity pool and the amount of JOE tokens being staked decrease, so would the price of JOE as indicated in the graph below.

Chart 04: Circulating Market Cap vs Total Value Locked

(Total Value Locked (TVL) is proportional to the amount of liquidity and the amount of JOE tokens being supplied/ staked on Trader Joe's protocol.)

2022 is also the year where financial markets around the globe have started to price in monetary tightening and rate hikes by Federal Reserve, and because JOE is not being viewed as a risk-off asset, hence this may be the reason where capital is fleeing from a risk-on assets like JOE to other risk-off assets.

On the positive side, the team behind Trader Joe has made a lot of progresses like what has been laid out in section 1B. Trader Joe's Project Updates earlier. These projects are intended to attract new users with better user experiences and to onboard more liquidity into the protocol. If the executions of these plans were to be successful, this would be bullish to Trader Joe in the long run.

In addition, it's also important to pay a close attention to Avalanche development. There would potentially be more tokens being listed on Trader Joe if there are more projects and token launches happening on Avalanche network.

Based on the latest statistics, Avalanche's development is quite optimistic, with a sharp increase of number of unique wallet addresses and the number of daily transactions are on a recovery trajectory after falling from its January peak.

https://snowtrace.io/chart/address
https://snowtrace.io/chart/tx

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