It feels like the multi/cross-chain world has been talked about for a while now. Despite how quickly the industry moves, certain things take time to manifest. The whole Ethereum gas-fee situation is beyond a joke and it is killing it for devs, users and the only people that seem to benefit currently are the miners.
Anyway, we saw the HUGE appetite for DeFi in December 2020 with the BSC boom and I’ll admit it treat me and a lot of the others in the Telegram really really well, but we knew that it would eventually come to an end and it did.
To be honest, I didn’t feel all too comfortable having capital on a 21 validator chain but I also couldn’t resist the yield and ridiculous gains we all achieved either. So it was a constant head and heart battle and an even more constant search for “what is next?!”
Polygon kind of came in a fashion, it never really go up and running properly for me and felt super buggy. The highlight was Mark Cuban being rugged with the rest of us.
So, on the hunt for the next layer 1 that could satisfy all my security concerns and appetite for yield, I started seeing more and more murmurs of Avalanche. It’s usually a 3 strikes rule for me, meaning: if I see or hear of it more than 3 times I check it out and 9/10 I experiment.
This can go either way but you have to experiment and try shit out in this industry or else you will find yourself indoctrinated in the same Telegram groups and bag holding on to broken promises from failed projects. It happens all too often. I am a certified bagholder myself, everyone does it just don’t make a habit of it.
Anyway, as I was saying Avalanche. So I bridged over to Avalanche and began having a look around. Unfortunately, I used the X-Chain to C-chain bridge as Binance only supported X-Chain withdrawals at the time and consequently missed out on a $1000+ airdrop of Good Bridging Token $GB, ngmi.
Binance actually supports Avalanche C-Chain withdrawals now, so no need to mess around with the X-Chain stuff.
So here is a quick thread...— blocmates. (@blocmatesdotcom) August 23, 2021
If you have funds on Ethereum mainnet you can seamlessly bridge for reasonable fees with the new ETH-AVAX bridge here.
The release of this bridge along with a huge $180m liquidity mining incentive kickstarted the Avalanche “rush”. Since then the chain has gone from strength to strength and it has also been reflected in the AVAX token price with a 150% move.
First of all… What is Avalanche? -
Avalanche is a true layer 1 blockchain which has EVM compatibility. It is made up of 3 chains. X-Chain, C-chain and P-Chain. C-Chain is where smart contracts are executed and hence this is where you will spend 99% of your time as an ape.
The protocol is ridiculously fast and reaches finality in around 2 seconds which is the fastest of any layer 1 protocol out there. Ethereum’s finality is around 6 minutes, whilst Polkadot is roughly 60 seconds. Crazy stuff…
Throughput is quoted as 4,500 tps again this is very impressive. Visa handle around 1,700 tps on their centralised ledger…
Using the Avalanche ecosystem first hand, transactions cost around 10-20 cents.
So it is quick, cheap and scalable.
Is it decentralised? Yup, at the time of writing there are around 1,040 validators and this is growing rapidly. Note: this will probably be a little more by the time I have finished writing this...
Avalanche achieves this perfect balance of decentralisation, scalability and security through its novel consensus mechanism which doesn’t rely on all nodes to verify the network’s transactions and interactions.
A white paper was proposed in 2018 by “Team Rocket” which was titled “Snowflake to Avalanche: A Novel Metastable Consensus Protocol Family for Cryptocurrencies”, which you can read HERE if that is your kind of thing.
The TLDR is that the protocol take random samples of the whole network and after around 13 sampled groups of nodes, consensus converges to a point of finality.
Basically, you have a football stadium (all the validators on the network) and you ask random areas of the stadium what the score is. After 13 groups of people have been asked what the score is there should be an achieved consensus on what the actual score is.
I found this talk by the Ava Labs founder Emin Gün Sirer extremely useful and easy to understand.
In summary, Avalanche has everything and once you try it out you will agree. I haven’t heard a bad word about it.
Thought process for investing in Trader Joe -
Due to the success of Uniswap and Pancake Swap and how well my UNI and CAKE positions previously did, I tend to look for the best AMM/DEX on a new chain. In doing this completely left side of the curve move, I found Pangolin and another DEX called Trader Joe.
I try to be a sensible ape when I am in a new territory so split my bags up. I picked up some PNG and also some JOE. This didn’t last long. Immediately after a nights sleep, I was thinking about how original and cool the Trader Joe platform was, so I got up and swapped everything I had into JOE.
I’m going to outline everything I have come to know and love about Trader Joe and the JOE token so you can make up your own mind based on my *unbiased* FACTS. Just messing, I am usually wrong so DYOR, I am literally an idiot.
What is Trader Joe and the JOE token?
As I said earlier, I tend to follow the same pattern when exploring unchartered areas of DeFi and look for the best performing DEX. Joe is hands-down the best AMM on Avalanche.
What is great for me is that it was refreshing and didn’t follow the same UI format as other DEX’s. You know the one. On the left, you have the exchange, pools, farms and a new upcoming feature that never gets launched. Yeah, it is old and boring.
JOE is different.
The platform was built in June/July 2021 (I think) by an anonymous team and launched on the Avalanche blockchain. I find it hard to believe how well the project has done in such a short space of time. Incredible.
Anonymous teams were once a little sketchy to the average DeFi user, but for me, it is a must in these highly Genslerarian times.
The UI is clean, easy to navigate and thanks to the Avalanche infrastructure a joy to use. The platform offers a DEX with an extremely useful candlestick chart, I didn’t know how badly I wanted this feature until I started using Trader Joe.
Farms for single-sided JOE and also plenty of the most popular liquidity pairs are available to earn some extremely tasty rewards. This will only get tastier once the Avalanche Rush liquidity incentive program starts… bullish.
Another cool feature is the zap feature. If you find that you want to pair JOE with AVAX in an LP and farm it for (at the time of writing) 151% annually… you can simply hit the zap tab, select what crypto you would like to convert to the JOE-AVAX LP and hit zap.
Instead of having to convert to both JOE/AVAX and then approve JOE, approve AVAX and then finally hit add liquidity. Using zap, you can bypass these unnecessary steps and head straight to the LP token. This also saves you on gas fees. Win-win.
For the impermanent loss-aphobes JOE comes with a dual staking mechanism that generates double yield… If you have used Sushi Swap then you will be familiar with xTokens. Trader Joe has a similar process with their single-sided JOE staking.
Process for double yield on your JOE tokens -
First, you take your JOE and head to the Stake tab.
Stake the amount of JOE you wish and in return, you will receive an equivalent amount of xJOE.
Take your xJOE tokens and head to Farm. From here you can deposit your xJOE into the xJOE farm and earn additional JOE… Rinse and repeat the process for maximum gains.
So where does the yield come from?
For every trade on the platform, 0.05% of each transaction fee is deposited into the xJOE pool. The fee is used to buy back JOE from the market roughly every few days. If by any chance you would remove your xJOE from the pool, then you will have amassed a very tidy yield in the form of more JOE.
If this doesn’t make sense, deposit JOE and earn rewards from every single transaction on the platform.
From an investors point of view, this is great in a few ways -
- You don’t suffer any impermanent loss as it is single-sided
- The constant buy pressure on the JOE token does wonders for the price
- As the platform continues to grow at a ridiculous rate, the more trades happen and hence the greater your rewards and price action will be… bullish
Don’t just take my apish word for it either. Token Terminal has a great feature on a lot of top DeFi projects which allows you to map token price against trading volume and lots of other variables.
So, from here we can see as trading volume increases price seems to also follow.
On the 19th of September, the platform recorded over $207m in trading volume. Basic maths says that 0.05% of $207m roughly equates to $103,500. All of this goes towards buying back JOE and redistributing it to the stakers.
It pays to be early here. Staking JOE whilst the platform is thriving and before the pool being overcrowded is the way to go.
So for a while now there have been murmurs of Banker Joe coming to town. On October 4th the big guy will arrive.
📅Banker Joe will launch Oct 4th
🔐Our auditors are ensuring the highest standards of security. Keeping protocol users safe, is top priority.Stay tuned for the Bankers Bonus Bonanza events schedule. Lots of Competitions & Rewards 💰Banker bros, get ready.#Lendingiscoming pic.twitter.com/vuAaBsh6sO— Trader Joe 🔺 (@traderjoe_xyz) September 17, 2021
So as this project aims to be constantly innovating and adding new and innovative DeFi products, Banker Joe will be a borrowing and lending protocol.
Banker Joe will follow the CREAM Finance and Compounds model of borrowing and lending. Initially, users will be able to borrow and lend WETH, USDT, DAI, AVAX, LINK, WBTC.
In the not too distant future users will also be able to access long-tail assets and even LP tokens in the future.
Leveraged trading could definitely be in the works given the above too.
Protocol fees from Banker Joe will also benefit xJOE holders (those staking JOE). This is hugeeeee.
Given the ridiculous amounts of TVL lending and borrowing generates for projects it is only natural to think that this will also reflect in the price of the JOE token. It just makes sense.
Venus Protocol($1.85bn), BenQi($1.1bn), Compound ($10bn) and AAVE ($12.95bn) TVL… enough said.
On top of that, each of the above is a one-dimensional product. They offer lending and borrowing and that is about as good as it gets. Not that they aren’t great because they are but where Joe can really really excel is by becoming the one-stop shop for all DeFi protocols in one of the fastest-growing ecosystems in crypto.
Recently, Trader Joe raised around $5m in a token sale from one of the most acclaimed funds in crypto: 3 Arrows Capital. Kyle Davies and Zhu Su have an excellent track record for their picks within the crypt space and I for one, will not be counter trading them.
For better or for worse, Alameda Research are also quite fond of the farms on Trader Joe…
There have been two sell-offs equating to roughly $1.7m in JOE that they yielded from farming multiple LPS on the platform with around $81m currently being used to farm.
To check how the other half lives, you can see their DeBank dashboard here.
I mean, it is pretty shit that they keep sucking the life out of popular DeFi projects but to be honest, I think Joe might be one of the few to actually be able to withstand the old Alameda curse.
I’d keep tabs on how they plan to use Banker Joe too… because they will.
Price Speculation and Final Thoughts
Given the expected TVL through lending and borrowing, increased activity on Avalanche due to Rush and overall more users finding and using the DEX, the protocol fees will be ridiculously large and offset any future dumping from such giga-whales.
Back to Token Terminal for a minute…
If you squint, yeah that is Trader Joe sitting at the 15th for the highest protocol revenue in the last 30 days…
Further digging into these revenue metrics we can see that JOE has a p/s ratio of around 10x. The p/s ratio is effectively taking the fully diluted market cap of a project, roughly $1.46bn and divided it by their on-track annualised revenue.
This places Joe in around 10th position (the higher up the table the more undervalued)...
Again, super bullish metrics particularly in a highly speculative market that sees often ridiculous valuations compared to their actual revenue generated.
Once that revenue generated increases, and we take into account that only around 20% of the JOE supply is actually circulating, we get a recipe for an extremely undervalued project with HUGE potential upside.
With a current market cap of around $258m, anything less than a $1bn market cap wouldn’t make sense to me.
Pancake Swap which is probably the most comparable project concerning product and gamification/memeability sits in at around $4.4bn. To save you the math, that is around 17x at the time of writing.
To make matters a lot better, the team have killed the marketing which is often way too overlooked in crypto. Whoever is looking after this aspect, well done.
All in all, if you can’t tell by now I am a Joe Maximalist at this point, there are often chances that you get given as an investor and this for me, is one of them.
Finally, I have written this on my own accord as I am a fan and investor of the project. That being said, I am available to write this kind of thing for other projects. If this is something you would be interested in you can contact me on Telegram @blocmates or by email at email@example.com
P.s Joe team if you are reading this please can I have a hat… thanks.
Resources for Trader Joe
- Site and dApp - https://www.traderjoexyz.com/#/home
- Twitter - https://twitter.com/traderjoe_xyz
- Telegram - https://t.me/traderjoe_xyz
- Where to buy JOE - https://www.traderjoexyz.com/#/trade
- YouTube Channel - https://www.youtube.com/channel/UCIriYwNuDjvpWCoeUKNDGhg