Jade Protocol Review

What is Jade Protocol?

Jade protocol is a decentralized venture capital fund based on the JADE token, which is a “free-floating” currency backed by the protocol’s treasury that holds assets in BUSD. Jade Protocol is a fork of Olympus launched on the BNB Chain. 

How does Jade Protocol work?

Jade Protocol has two value accrual strategies, which are Staking and Bonding, where the JADE token is an essential element of the ecosystem.

JADE tokens can be minted or burned only by the protocol. Each JADE is backed by at least 1 BUSD (not pegged to it). If the JADE price falls below 1 BUSD, the protocol buys back and burns JADE, to restore the price to 1 BUSD. 

Staking is a passive, long-term strategy. Users who stake their JADE tokens receive rebase rewards, which are generated from the bond sale. Rebasing is a process of auto-compounding yield, which requires the protocol minting new JADE and paying that newly issued JADE to JADE stakers. In order to be able to mint that JADE, the protocol needs to have 1 BUSD (or an asset of equivalent value) in its treasury for each new JADE it mints. Rebase rewards can change depending on the number of JADE staked in the protocol.  

When staking JADE, it is locked into the protocol and yields an equal amount of sJADE.  sJADE balance rebases automatically at the end of every epoch, which lasts eight hours. sJADE is transferable and composable with other DeFi protocols. Whenever the token is unstaked, sJADE is burned and an equal amount of JADE is given back to the user.

Bonding is an active, short-term strategy. JADE’s treasury accumulates liquidity through Bonding. Bonds are sold by the protocol to acquire non-native assets like BUSD, and in exchange, the bonder gets JADE at a discounted price, which can be claimed over a five-day vesting period. 

10% of the treasury is used for buyback and token burn and 5% is used for marketing purposes. 

How to use the Jade Protocol?

As the first step to use the Jade app, it is required to connect a wallet. Jade Protocol wallet supports include  Metamask, Ledger, Tokenary, Infinity Wallet, SecuX, Ambire, KryptoGo, and Wallet 3.

For staking, a user needs to have or buy JADE tokens. On the front page of the Jade app, a user needs to navigate to the ‘Buy’ section, which will switch him to the PancakeSwap page, after purchasing the token, the user can return to the Jade app and go to the ‘Stake’ tab. Then it is necessary to add the desired number of tokens to be staked and confirm the transaction in the wallet. Once it is confirmed, the user is able to see the APY, staked JADE balance, daily earnings, and the rebase period. 

For Bonding, it is necessary to click the ‘Bond’ section on the main menu. Currently, Jade Protocol offers three types of bonds, which are JADE-BUSD LP, wBNB, and BUSD. The user needs to click on the bond of choice, enter the number of tokens to be bonded, click ‘Bond’ and confirm the transaction. The bonder can claim some of the JADE tokens as they vest, while the full amount will be claimable over the period of five days. 

The JADE token

The circulating supply of Jade tokens is 1,091,683, 68.83% of which are staked tokens. The JADE token is the protocol’s rebase token, which can be bonded or staked to earn yield.

Is Jade Protocol safe?

The protocol has not been audited yet. 

In mid-December, 2021, just a week after the JADE airdrop, which encouraged users to buy JADE tokens and stake them with the rewards of roughly $30M in BUSD, the protocol suddenly reduced its APY to 0% without warning the community, which crashed the price of the JADE token. Many users have also complained that they have failed to claim their airdrop rewards. This has caused users to attack the protocol’s social media with scam accusations. The protocol’s community has since failed to provide any clear explanations neither on Twitter nor on Discord. 

The team behind the Jade Protocol is Fair Launch Foundation, whose members are claimed to be lead developers from Google and Amazon, a Harvard professor, industry-leading marketing veterans, a game architect, and a Y-Combinator alum. The team has however decided to remain anonymous for safety reasons.  

The project founders have privately verified their full identities with RugDoc. However, the RugDoc has classified this project as Not Eligible with the recommendation to pass the reputable audits and KYC verification.  

Partners

Jade has partnered with Jetswap to establish a 2:1 JADE and WINGS token swap to benefit both ecosystems. Another partnership was made with CafeSwap with a new staking pool where users can stake BREW to earn JADE. A new farming pool will also be available in a JADE-BNB liquidity pair.

What’s next?

Jade is planning to be launched on Avalanche soon and to be integrated on more chains in the future. 

Links

https://jadeprotocol.gitbook.io/jade-protocol/