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Last updated: Nov 23, 2022
Trader Joe is a decentralized trading platform built on the Avalanche blockchain. In a short time since its launch in July 2021, it became the largest DeFi platform on the network.
The exchange holds a smiling grey-haired farmer with a beard and a pitchfork as a mascot, and prides itself on being a one-stop decentralized trading platform on the Avalanche network. To support this claim, Trader Joe offers a full variety of DeFi services to its users, such as swaps, lending and borrowing, yield farming, and liquidity mining programs.
The Trader Joe exchange is an automated money maker, which charges a 0.3% fee on all trades. Most of this fee (0.25%) is later paid to liquidity pools in the form of a trading fee for liquidity providers while the rest (0.05%) goes to JOE stakers.
The LP tokens received in exchange for providing liquidity to Trader Joe’s pools can also be staked to earn JOE tokens in the Farms on top of trading fees.
Trader Joe provides plenty of opportunities for Yield Farming on its platform. Currently, there are at least 50 different pools including pools with stablecoins for those who try to avoid encountering impermanent loss, and a so-called Farmers Market that allows users to stake in double reward farms to earn JOE as well as bonus token rewards, boost farms which offers increased JOE rewards.
Trade Joe Zap is a new feature allowing users to instantly obtain LP tokens for the pool they wish to farm without having to do it manually. Although, users must be warned about the high slippage tolerance when using this feature.
The platform also actively promotes staking among holders of its native token, JOE. For Avalanche users already providing liquidity on the network's oldest DEX, Pangolin, Trader Joe offers a simple UI feature to migrate their liquidity.
In addition to basic DEX and AMM features, the platform offers DeFi lending and borrowing options via the Banker Joe decentralized lending protocol built onto the Trader Joe dApp. Banker Joe offers investors the ability to lend or borrow against whitelisted assets (WETH, USDT, DAI, AVAX, LINK, WBTC, USDC), which will be expanded to long-tail assets as well as LP tokens in the future.
Rocket Joe is another new feature of Trader Joe, which is a liquidity launch platform designed to facilitate the launch of new tokens on Trader Joe, where participants bid to provide liquidity for newly issued tokens in exchange for an allocation of that particular token. Users wishing to participate in Rocket Joe, have to stake their JOE tokens for rJOE tokens, which will be the credit to enter Rocket Joe Launches.
An upcoming new version of the Trader Joe AMM protocol was announced in late August 2022, including a novel concept named Liquidity book. The Trader Joe v2 is said to be much more efficient battling impermanent loss while also affecting slippage on the platform.
Users wishing to interact with the Trader Joe app, must first connect their wallet of choice and have some AVAX to cover gas fees. Trader Joe wallet support includes Metamask, Rabby, Coin 98, Coinbase Wallet, and the Wallet connect protocol.
Once a wallet is connected, users can go to the Trade page, if they want to swap one token with another. Here they need to select two tokens in the drop-down fields or enter the tokens names of addresses, enter the desired amount, set the slippage and approve the trade by clicking the Confirm Swap button and paying the gas fee.
If users want to earn a share from the trading fees generated by Trader Joe’s liquidity pools by providing liquidity to them, they need to head to the Pools page, select the desired pool from the list, or by using the page filters or typing in specific tokens or their addresses.
In return for depositing Tokens to a Pool, users receive an LP token representing their share of the pool, which can also be staked in one of Trader Joe’s farms to earn extra yield in addition to trading fees.
For that to happen, users need to navigate to the Farm section and select the farm to deposit their LP token; this will open the Manage farm page, which displays the Farm details. Then the user needs to click on the Stake button, enter the amount of LP tokens to be deposited and approve the transaction by clicking the Deposit button and paying the gas fee. The rewards can be harvested at any time by simply clicking the Harvest button, which will transfer all the pending rewards to the user's wallet.
Users wishing to engage with Trader Joe lending and borrowing services need to head over to the Lend section, which will take them to the Banker Joe page. The Banker Joe screen is divided into two markets: deposits and borrowings. Here the user needs to select the token to be supplied for other users to borrow. As soon as the asset is deposited, the platform yields a receipt in the form of Jtoken (jAVAX, jUSDC), which accrues interest.
Besides supplying an asset in return for a percentage of the fees generated by the protocol, users can also borrow against that asset, essentially, using it as collateral. Users need to be aware of their collateral ratio (set for each asset individually), and know that if their borrowing limit is exceeded, a portion of their so-called borrower’s collateral will be liquidated to return their account to good standing.
Trader Joe also offers comprehensive video guides for its users to facilitate their experience.
JOE is Trader Joe’s native token that also rewards its holders with a share of the exchange’s revenue. After the launch of the project’s governance system, JOE tokens will grant voting power to their holders.
According to the platform’s tokenomics, 50% of the total JOE supply of 500 million tokens is distributed to LPs while 20% is allocated to the Treasury, 20% goes to the developers team, and 10% is intended for future investors. The token emission will last until 2024.
Trader Joe has recently introduced an updated staking mechanism called Modular staking with three staking pools available.
JOE holders can stake their tokens in exchange for sJOE and benefit from the revenue generated by the platform, paid in stablecoins.
Users can stake their JOE tokens into rJOE and gain access to Rocket Joe Liquidity Launches on the project’s Launchpad platform. rJOE is non-transferable and is burned when used to enter Rocket Joe Liquidity Launches.
Another option is to stake JOE tokens into veJOE and earn boosted JOE rewards in selected farms. veJoe will also grant voting power in future Governance.
As is often the case with DEXes, Trader Joe was founded by an anonymous team. The two co-founders hide by pseudos 0xMurloc and Cryptofish and are quite active on Twitter. They are both full-stack developers, but while Cryptofish is a smart contract engineer, 0xMurloc is specialized in product management.
Before founding Trader Joe, Cryptofish worked at Google and derivative-oriented CEXs. He was also an early contributor to several Avalanche projects such as Snowball and Sherpa Cash. 0xMurloc has experience launching several startups, the most recent of which was his work as a Senior Product Lead at Grab.
The core team of Trader Joe enlists eight members with additional ten people engaged in the community management.
Trader Joe has also introduced a Bug Bounty program with a reward of up to $20,000 USDC.
Trader Joe lists Avalaunch and Yield Yak from the Avalanche community as its strategic partners.
As of September 2021, Trader Joe has raised $5 million in a strategic sale led by Defiance Capital, GBV, and Mechanism Capital. Other VCs and angel investors include Not3Lau Capital, Three Arrows Capital, Coin98 Ventures, Delphi Digital, Avalanche Foundation, and Stani Kulechov. Avalaunch and Yield Yak also backed Trader Joe.
Trader Joe has recently partnered with Ferrum Network to expand the Avalanche ecosystem and grow the common TVL. Another important partnership was made with Yeti Finance, which has integrated a broad range of Trader Joe assets.
Trader Joe has already hosted five participants under its novel Rocket Joe feature, namely Hoppers Game NFT game, Echidna Finance yield boosting protocol, Vector Finance stablecoin protocol, Fief Guild metaverse project, and Heroes of NFT P2E NFT collectible card game.
Currently, the platform is focused on implementing a DAO-like governance system.
According to the roadmap, in 2022, Trader Joe plans to become a hub for DeFi innovation and an ambassador for NFT & Metaverse culture on the Avalanche network.
The Trader Joe v2 with its novel Liquidity Book is expected to be released in Q3 2022.
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