Welcome back to the Avalanche deep dive
Today, we are going to focus on Trader Joe.
Trader Joe is the go to DEX (Decentralized Exchange) on Avalanche. Usually money follows the memes and community and Trade Joe has managed to nail that. Their twitter is full of alpha advice in the comments and memes are flowing steadily.
They offer the usual trading/swapping capabilities and now, they are going to provide lending and leveraged trading through their “Banker Joe” system, you can learn more about that here.
In the interim, we are going to explore the multitude of services available on their website.
You first have your typical swap offered by your run-of-the-mill Dex called “Trade” here. You are able to swap between a plethora of coins as well as adjust the slippage (Slippage refers to the difference between the value at time of selling and at execution of the trade). What I really enjoy about their “trade” section is that they provide a price graph with it, super useful when looking at how pairs are doing.
Next, it’s time to take a dip into the pool!
At the pool you are able to add liquidity to pools. To do this, one would select the relevant pool (AVAX-USDT.e, for example) and add an equal split between the two coins. For example, if you have $500, you would add $250 of AVAX and $250 of USDT.e, if you do not add an equal split of liquidity you can risk getting arbitraged.
By adding liquidity to these pools you are eligible to earn fees from the pool, you have provided liquidity in and sometimes you will also be eligible to earn rewards in the form of the Dex’s native token, such as Sushi. Once you have provided the liquidity, you will be given some Liquidity Provision token (LP) that represents your share in the pool. You will receive the fees you have accumulated when you return the LP tokens and get back your coins.
Now for the fun part!
Here we will return to the old age tradition of farming, and in this case yield farming.
With the farm, you are able to stake certain LP tokens and in exchange for providing said tokens, you will receive back Joe.
The above are just an example of some of the high annual percentage rates (APR) you can get from providing liquidity in said pools. This is a much more lucrative method of collecting capital as unless you have a large share of the pool, you won’t be receiving much back in the form of fees. Here one is able to deposit their LP tokens and then receive their “interest” earned in the form of Joe, which is Trader Joe’s native token.
Another example of what you are able to do with the Joe token is to stake it. Essentially you are giving them control over your assets (i.e the joe) and in exchange you are given xJoe which is similar to how xSushi works. However, Joe and xJoe are not exchange 1:1, as seen in the above picture 1 xJoe is 1.11644 Joe.
When you withdraw the xJoe, you will receive all the originally deposited Joe and some others from fees.
These are just some of the features that Joe currently offers. They also recently announced that they would also be joining the Avalanche rush! Looking at some of the features and the way the community engages with Trader Joe, it is safe to say that Trader Joe will be sticking around for the long run. Hopefully this can help you start your learning adventure with Trader Joe.
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