Crypto Trader Joe: DEX on Avalanche

TraderJoe.

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Oct 20, 2021

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TLDR below. This is not financial advice.

General Conclusion

From a brand new AMM project with no initial funding, Trader Joe has gradually established himself as one of Avalanche's top AMMs. Today's article about Trader Joe and $JOE will give you all the information about:

What is Trader Joe? Trader Joe's Highlights.
Information about tokenomics.

What Is Trader Joe?

TLDR: DEX on Avalanche protocol

Trader Joe is an AMM decentralised exchange platform on the Avalanche blockchain. Trader Joe is a fork of Uniswap. There are not too many AMMs on Avalanche yet, but the most popular AMM among users on this blockchain is Pangolin, so it can be said that Trader Joe's direct competitor is Pangolin.

Highlights

Trader Joe, in addition to being an AMM, also integrates a number of features such as Yield Farming, Lending, Staking, etc. with the aim of becoming an aggregate platform and bringing the best experience to users.

In addition, users can exchange tokens for $LP tokens with just 1 click through the Zap feature — a new feature on AMM.

Source: https://www.traderjoexyz.com/#/zap

If other projects raise capital before making products, then Trader Joe has a completely opposite direction.

They are not a Fair Launch project (no token sale, the team does not hold tokens) but they will run the project, the entire $JOE - project token will be unlocked through inflation. However, Trader Joe still has an allocation for future investors if any.

Products

Trade: This is a main product which user can swap their tokens.
Pool: Where user can add liquidity into the pool and earn trading fee. (0.25%)
Farm: This is an incentive program that encourage LPers provide liquidity and make more benefit.
Lending: Where user can borrow more assets
Stake: Stake $JOE to earn revenue.
Zap: Swap between token and LP token.

Token Design

$JOE is governance and utility token of Traderjoe. There is total of 500m $JOE. $JOE is used to:

Governance. Proposals will be voted on, with JOEVOTE to decide the outcome. JOEVOTE is determined by
- Each $JOE in the JOE-AVAX pool is worth 2 JOEVOTE
- Each $JOE held via $xJOE tokens equal 1 JOEVOTE
- Each $JOE is worth 1 JOEVOTE
Stake $JOE and earn revenue from trading (0.05%) and lending which will be distributed to $xJOE.

Returns

Yield Farming

You can earn $JOE by depositing (or "staking") your $LP tokens into farms. $JOE will be automatically rewarded in proportion to your share of the farm.

You may withdraw (or "harvest") your $JOE and your $LP tokens at any time.

Staking

You can earn additional rewards by staking $JOE into the JOE farm.

Also, you may stake your $JOE to $xJOE. Over time, you’ll always earn more JOE by holding xJOE tokens. This is because for every swap on Trader Joe, a 0.05% fee is charged and sent to $xJOE pool. This fee is used to buy back $JOE periodically (currently, buy-backs happen every 2 days). So when you exchange your $xJOE for $JOE, you'll get more $JOE than what you started with.

When lending is launched, there will also be platform fees shared to $xJOE participants.

Similar Projects

Pangolin: AMM has a similar structure to Uniswap but on the Avalanche blockchain platform.
Uniswap: Automated Market Making Protocol (AMM) and also a DEX built on the Ethereum Blockchain, allowing users to swap any ERC-20 token.

Why is it Popular

Avalanche, as a platform, is growing tremendously. The easiest way to get in is via exchanging tokens for another. Think of it as using cash to buy disneyland tickets to enter. Trader Joe is the disneyland cashier to help facilitate that trade.
Liquidity is key to survival for such DEX projects. Hence, Trader Joe needs to attract liquidity. The incentive mechanism is to give out $JOE.
Inflation rewards of $JOE to attract liquidity. Known as yield farming, you get to earn $JOE by being an LP. $JOE can be traded and hence has a market price. Think of it as "free money", in a sense.
Other than just a DEX, it incorporates many other features like lending and staking. It is also easy to use, which helps in user adoption.

TLDR:

Thus, I introduced you to the Trader Joe project and what $JOE is, and provided all details about the project's highlights and tokenomics.

It can be said that Traderjoe is a prominent AMM right now when the TVL of the protocol has surpassed $2B. New products are launched towards an all-in-one platform with the most recent being a lending product. If Traderjoe's lending develops well, it will set the stage for further development related to derivative products.

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