Trader Joe: TVL Sleeping Giant
Decentralized exchanges (DEXs) are an integral feature of every top blockchain project. Decentralized Finance is impossible without a robust DEX that allows for the concentration of liquidity. The coordination of concentrated liquidity on-chain is what we call DeFi. Each top blockchain project has a corresponding DEX associated with it. Currently Ethereum’s main DEX is Uniswap and Binance Smart Chain's main DEX is PancakeSwap. These Decentralized exchanges have associated tokens that currently sit at a $7 Billion and $2 Billion market cap respectively. Both of these DEXs became mainstays of their respective blockchains by outperforming competing projects in Total Value Locked (TVL), trade volume, and daily unique users. In short, Uniswap completed this task by being first while PancakeSwap drastically reduced swap fees on their platform which drew in the majority of BSC users. As of today, the top ten coins by market cap are all layer ones. It should be obvious to us that each of these layer ones will have a dominant DEX that becomes heavily intertwined into the identity of the blockchain project itself. The question is how do we identify the DEX that will prevail?
In this article I will be focusing on the Avalanche blockchain, an Ethereum Virtual Machine (EVM) compatible chain with high transaction speed and low settlement time. This blockchain project is heavily backed by 3 Arrows Capital, Polychain Capital, and IOSG Ventures along with many other private investors. Avalanche’s token $AVAX had a $220 million market cap in January 2021 and has a current market cap of around $22 billion. This meteoric rise has led to a fully-fledged DeFi and NFT trading ecosystem on Avalanche. One of the most impressive projects built on Avalanche is Trader Joe XYZ. Known by most as Trader Joe, it is well on its way to becoming the go-to DEX for Avalanche users. As of right now Trader Joe has $2.3 billion in TVL winning it the top slot for TVL on the Avalanche blockchain. That is $1.1 billion more TVL than the Curve Finance which holds the second largest TVL on Avalanche.
Trader Joe aims to be a one-stop-shop for the Avalanche Ecosystem. What started out as just an Automated Market Maker (AMM) has quickly turned into a yield farmer, liquidity providing, and lending giant. Trader Joe currently supports 131 tokens and 556 liquidity pairs. Just yesterday Trader Joe had a $224 million trading volume associated with these liquidity pairs and collected $550 thousand in fees from these transactions. These fees are split between liquidity providers and holders of $JOE which is Trader Joe’s token for governance and a way for users to capture a portion of fees accrued by Trader Joe’s protocol.
Who is behind Trader Joe XYZ?
The founders of Trader Joe are sudo-anonymous pair who go by Cryptofish & 0xMurloc. They founded Trader Joe in June of 2021 as a result of their dissatisfaction with the then top DEX on the Avalanche network, Pangolin. Both founders thought that Pangolin was not innovating fast enough nor listening to their user base and decided that Avalanche users deserved a more community focused DEX. Cryptofish & 0xMurloc are full stack developers and solidity coders. Cryptofish is the head of the project and most active on twitter. Cryptofish has a master’s in computer science, has worked for Google, and has experience working for a centralized exchange specializing in derivatives. 0xMurloc is the product manager and a family friend of Cryptofish. Trader Joe currently lists seven people as their “core team” and eight people as their “community team” all of which excel at their niche within Trader Joe. Trader Joe is backed by Three Arrows Capital, Delphi Ventures, DeFiance Capital, The Avalanche Foundation, and other private investors and VC firms not mentioned here.
What is behind $JOE?
$JOE is a token on the Avalanche network and the governance token of the Trader Joe decentralized exchange. Stakers of $JOE receive a portion of transaction fees accrued by the protocol. There are many ways to get involved in the Trader Joe ecosystem. The easiest of which is buying and holding $JOE. $JOE currently has a market cap of $235 million and a circulating supply of 154 million. The max supply for $JOE is capped at 500 million. This leaves massive room for growth. You could also become a liquidity provider for any of their token pairs. 2021 was the year of alternative layer ones. 2022 is the year of DeFi. Memes and money reign supreme in this space and Trader Joe excels in both.
Written by David Coryat, Crypto native and Analyst at Istari Capital LP.
This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this report constitutes a solicitation, recommendation, endorsement, or offer by Istari or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. Please be advised that Istari Capital LP is invested in the project discussed in this article and/or in projects related to this article.