# TRADER JOE THESIS

**Published by:** [OxFrancesco](https://paragraph.com/@oxfrancesco/)
**Published on:** 2023-12-22
**URL:** https://paragraph.com/@oxfrancesco/trader-joe-thesis

## Content

ℹ️ OVERVIEWTrader Joe is mainly a Dex native to the Avalanche Chain that has expanded to include the Arbitrum, BNB, and Ethereum Chains. As of now, it's ranked 3rd in the Avalanche chain for TVL, with a 120M+ TVL.DefiLlamaTraderJoe has evolved significantly, offering a suite of services that extend far beyond standard token swaps. Users can access liquidity pools for cryptocurrency farming, engage in staking opportunities with JOE tokens, explore a vibrant NFT marketplace called 'Joepegs,' utilize a cross-chain bridge, and delve into comprehensive cryptocurrency lending services.🏝️ MERCHANT MOEAdding to this ecosystem of innovation is Merchant Moe, the liquidity hub for the Mantle Network, emerging as a key player alongside Trader Joe. Merchant Moe, a Trader Joe franchise, is backed by the Mantle EcoFund and is set to become a central DEX within the Mantle Ecosystem, focusing on nurturing new and exciting DeFi technology.📍 Core Services and FeaturesDecentralized Exchange (DEX): At the heart of TraderJoe is its robust exchange, facilitating seamless and secure token swaps across multiple networks.Yield Farming and Staking: TraderJoe introduces innovative staking mechanisms like sJOE and veJOE, providing users with a variety of incentives and governance powers.Banker Joe: This lending protocol allows users to earn interest on their assets or borrow against collateral while implementing risk management features to mitigate inherent DeFi risks.JoePegs: As TraderJoe's dedicated NFT platform, JoePegs is at the forefront of the NFT sector within DeFi, offering trading and auctions.Launchpad for New Projects: TraderJoe serves as a springboard for emerging projects in the DeFi space.🪙 TokenomicsThe tokenomics of TraderJoe, as of 2023, involve several key tokens, each with distinct functionalities and status:JOE: This is the primary multi-utility governance token of Trader Joe. It has a fixed supply of 500 million, with 92.8% minted and 62% in circulation. JOE currently has emissions of 14.6k per day and is integral to the governance and operations of the DEX.sJOE: sJOE token allows stakers to earn a share of the trading fees from the DEX. It is becoming a multi-chain staking option available on Avalanche, Arbitrum, and BNB. The V2 Fee share deployment is planned, with a 1% deposit fee.veJOE: This token was designed for emissions sharing for the v1 Automated Market Maker (AMM), providing enhanced JOE yield. veJOE holders can receive boosted JOE rewards from the Liquidity Book Rewards Program. It continues to receive boosted emissions on v1 farms and is exclusive to Avalanche.rJOE: rJOE, associated with the Rocket Joe protocol, is being deprecated in its current form. Stakers of rJOE will be awarded commemorative NFTs, and there are potential plans for the protocol.The $MOE Token, central to Merchant Moe, will be initially available exclusively to $JOE holders. They can bridge and stake their tokens as mJOE on the platform, with the bridge and staking features going live soon. Holders are eligible for a 2.5% $MOE supply airdrop at the token generation event, plus an additional 5% distributed over a year for continued staking. https://x.com/MerchantMoe_xyz/status/1737486798853407111?s=20 TraderJOE Statistics from Token TerminalThe thing that interests me the most is the Annualized Revenue, which is not that bad at a "$12M📚 Liquidity Book V2.1 - An AMAZING UPGRADETraderJoe's Liquidity Book V2.1, released in late 2023, introduced several innovative features to improve its capabilities:Autopools: These function offers automated liquidity strategy execution, allowing users to deposit tokens and receive token receipts usable in various DeFi operations like Yield Farms, collateralization, and leveraging. Autopools are expected to incorporate more advanced techniques over time, such as off-chain signals and alternative asset mixes​​​​.sJOE Fee Sharing: The V2.1 upgrade enabled fee sharing for sJOE stakers, distributing a percentage of fees from Liquidity Book pools to them.Permissionless Pools: V2.1 allows for permissionless pool deployment, enabling anyone to create pools with any asset pair.Improved Fee Structure: Now fees are automatically claimed and compounded into the active bin where they were accrued​​.Native Limit Orders: A new feature to execute swap instructions at desired price points is in the works. It will function as a 'Maker' type liquidity order, allowing users to deposit tokens into a Liquidity Book pool and withdraw liquidity if the desired price is reached​​.Security Audits: Liquidity Book V2.1 and Autopools have been audited by Paladin Security, with an additional Audit Contest program planned with Immunefi to ensure security and reliability​​.These upgrades, including the reduction of typical gas costs by 30-40%, are part of Trader Joe's efforts to create a more capital-efficient and user-friendly DEX​​. In terms of design and functionality:Trader Joe’s Liquidity Book improved on Uniswap V3’s concentrated liquidity model by using “bins” instead of “ticks” for price separation, enabling zero price-impact trades as long as a single trade doesn’t exhaust all the liquidity in a bin​​.The price bin system enhances composability and flexibility, making Liquidity Book positions more fungible and allowing for a range of custom strategies and unique liquidity provision shapes​​.Variable fees on pools were introduced to mitigate the impact of impermanent loss, with fees adjusted based on pool volatility​​.The V2.1 launch happened in three phases, focusing initially on V2.1 pools, Autopools, and Permissionless Pools, followed by the integration of sJOE on Arbitrum and BNB, and finally, the implementation of Autopool Farms and Limit Orders​​.🏊🏻 Auto-PoolsAutopools are my favorite things about TraderJoe, they offer a 'set-and-forget' farming strategy, offering impressive APRs for various coins. Their dynamic, off-chain management ensures scalability and efficiency, making them a popular choice among users.🏝️ MERCHANT MOEhttps://merchantmoe.substack.com/p/merchant-moe-the-liquidity-hub-for😶‍🌫️ FINAL THOUGHTSTraderJoe's blend of innovative services, solid tokenomics, and user-friendly features positions it as a formidable force in DeFi. It's more than just a DEX; it's a comprehensive ecosystem driving the future of decentralized finance. You can find all the sources I used below. If you found this article helpful, please consider supporting my work by collecting this article. Have a wonderful holiday, and see you next year with new and more amazing content.🔗 SOURCES Coincu about Trader Joe Liquidity Book V2.1: coincu.comCoinMarketCap about Trader Joe Liquidity Book DEX: coinmarketcap.comBSC News about Trader Joe Liquidity Book V2.1: bsc.newsTrader Joe Help Center on Autopools: support.traderjoexyz.comCoincap - Crypto News about Trader Joe's Auto-Pools: coincap.newsTradingView News on Trader Joe Auto-Pools: tradingview.comCrypto Daily on Trader Joe Auto-Pools: cryptodaily.co.ukHackerNoon on Trader Joe’s Case AnalysisCryptonews.net on Trader Joe's Security BreachJoe Content on JOE TokenomicsCoinCarp on Trader Joe TokenomicsCoinMarketCap on JOE TokenTrader Joe: Q3 2022 ReportTrader Joe Launches Governance System - TokenInsightTrader Joe Review 2024 - CoinBureauTraderJoe: a Snapshot - GBV CapitalAvalanche DEX Trader Joe Plans to Make its Tokens More Valuable for Users - CoindeskTrader Joe Deactivates Frontend Following Potential Exploit - Bull ToolsWhy Multi-Auditing of DeFi Projects is Important - HackerNoonTrader Joe - Detailed Report - DeFiSafetyIntroduction to Auto-Pools - Trader Joe Help CenterLiquidity on Autopilot with Trader Joe Auto Pools - Fraxcesco SubstackTrader Joe Goes All-In On Auto-Pools: Game-Changer For DeFi Investors? - CryptoPoolsHow to use Auto-Pools - Trader Joe Help Center

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