What is Trader Joe （JOE）？ The official Avalanche DEX

[TL;DR]

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What is Trader Joe? Trader Joe is Avalanche’s main DEX protocol where users can swap, stake assets, invest in liquidity pools, join Initial Dex Offerings and more.

Main services: swaps, auto trade tools, liquidity pools, yield farming, staking and Rocket Joe - where users can invest in new cryptos recently launched in the Avalanche network

Tokenomics: Total supply of 500 million (currently 180), released over a 30-month period. Out of all tokens issued, 50% goes to liquidity providers, 20% to the team, 20% to the treasury and 10% for strategic investments.


[Full Article]

Every crypto network inevitably needs a Decentralized Exchange, or DEX; a place where its users are able to invest, stake and swap assets that are native to that particular protocol. In the case of Avalanche (AVAX), that DEX is currently Trader Joe (JOE) - the biggest DEX in the network.

In this article, we go through what Trader Joe is and what makes it the main DEX in Avalanche, its services, investing options and tokenomics.

What is Trader Joe (JOE)?

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To put it in a nutshell, Trader Joe is Avalanche’s main DEX protocol. The BNB Smart Chain has PancakeSwap, the Ethereum network has UniSwap and SushiSwap as their go-to DEXs, and Avalanche has Trader Joe.

Officially launched in August of 2021, Trader Joe has the goal of being everyone’s one-stop-shop for all DeFi services conducted in the Avalanche network. While the token JOE currently holds a market cap of 160 million dollars at the time of writing, Trader Joe holds up to 1.5 billion dollars in assets under management, according to its official website. It also has a daily trading volume that varies greatly between 50 million dollars and up to 300 million in asset trading, swaps and other services.

Since both Avalanche and Trader Joe are relatively new protocols, there aren’t many assets available to trade: 174 coins in total, with a large portion of them being wrapped versions of AVAX to fit cryptos from different networks such as USDT (Ethereum) and BNB (BNB Chain).

Although it’s not even a year old, Trader Joe is showing lots of potential as the value in daily trading volume regularly surpasses the total market cap of its JOE token. Not only so, but its vast range of services brings several options of investments to choose from, as we describe below.
Crypto swaps and auto trades

Much like other Decentralized Exchanges, Trader Joe offers crypto swaps in a quick and timely manner under low fees: 0.3% per trade, where 0.25% is paid to liquidity pools and 0.05% goes towards staking farms.

What makes Trader Joe’s swap and trading frameworks stand out is that it offers the option of auto trades, such as limit buy and stop-loss orders. Users are able to set up particular prices for swaps and have them be automatically executed without them needing to conduct the operation manually. This allows investors to hedge risk, protect their wins and buy at any price, all under a decentralized ecosystem.

Liquidity pools, Yield Farming and Staking

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Trader Joe offers liquidity pools in several pairs, where investors receive 0.25% of all trades dedicated to the particular pairs they have invested in. Contrary to most new projects labelled as decentralized exchanges, Trader Joe doesn’t offer very high LP rewards; they currently vary in the range of 5 to 40% APR. It’s important to note that we are currently in a very volatile market with downward trends over the past 5 months, so high APRs are not expected.

Yield Farming options in Trader Joe are very straightforward, and split between three rewards systems: Farmers Market, where investors get rewards in the token JOE + the paired crypto, noJOE farm where the rewards are only in the paired crypto and Farm, where users are only compensated in JOE.

Staking also provides three different options: users can stake JOE into veJOE to receive rewards from farms and governance, sJOE for stablecoin rewards and rJOE to participate in rewards from the Rocket Joe platform.

Rocket Joe, the IDO of Trader Joe

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Rocket Joe can be described as Trader Joe’s official IDO and ICO launchpad for new tokens that will be released on the platform. ICO is the Initial Coin Offering for a crypto that is about to be released, while IDO is the Initial DEX Offering for when a token is released for the first time in a particular Decentralized Exchange. Since Trader Joe is Avalanche’s biggest DEX and both are fairly new projects, it does both; users invest AVAX into new pairs in a liquidity pool where the upcoming token is the other asset, and receive awards for it. It’s a great way to keep track of new cryptos that are being released on the Avalanche network while potentially earning high rewards in the long run from a new protocol. But be aware: these liquidity pools mostly have withdrawal penalties, some as high as 20% of the entire amount invested, so choose with caution.

JOE Tokenomics

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According to official documents from the team, the issuance of JOE tokens occurs monthly and will take 30 months until all of them are emitted. At that point, the total supply will be 500 million JOEs, against the current 181 million at the time of writing. Much like Bitcoin’s halving, where every four years or so Bitcoin mining gets twice as difficult, JOE will experience a similar approach to the upcoming months of supply issuance. In the month of August 2021, for instance, 20 JOEs were issued per second. At the current month of March, that number has dropped to 8, and will be down to 0.3 JOEs per second in January of 2024.

As for the general token distribution, 50% goes to liquidity providers, 20% to the team, 20% to the Trader Joe Treasury and 10% to “potential strategic investors.”



Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
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