Incentivizing the JOE Token — Liquidity Farming Phase 2

Published on: 01.08.2021

TLDR; $JOE hodlers rejoice! They are announcing a new single-sided xJOE farm, with no IL and up-only; Also, they will prioritize trading volume which lead to more fees for xJOE holders.

They are now sitting at $3.4M market cap, $23M+ TVL and capturing 18% of daily trading volume on Avalanche, which is an impressive start for a new DEX.

On August 3rd, JOE emissions will reduce from 30 JOE per second to 20 JOE per second. In this post, their outline their strategy for prioritizing JOE token holders while remaining competitive for liquidity growth.

Their Priorities

Going forward, they propose the emissions strategy to prioritize, in this order:

Trading Volume: Liquidity farming is a growth bootstrap to achieve TVL for the purpose of attracting trading volume. A high TVL or high JOE token price without capturing trading volume is no good. Trading volume is intimately tied to the value of the JOE token as xJOE receives 0.05% of all trades as revenue. One of our strategies will be to capture trading volume for new tokens, with the recent SHERPA launch a great example of this. We want Trader Joe to be the destination to trade new tokens, and we will leverage farm emissions to do so. Another strategy will be optimization. They will reduce or even cut farms for non-productive assets.

Incentivizing JOE holding:

Everyone loves a good yield farm, and even better if you can do it on your favorite auto-compounder. For new DEXes, auto-compounder partnerships can bring a lot of TVL and volume. However, this growth comes at the cost of continuous sell pressure on their token. They will continue to spend their emissions on growth, but will favor JOE token holders going forward.

Liquidity:

Liquidity is still an important metric for them. Currently, they just over 16% of Pangolin’s TVL. Thier goal for next month is to double that to 32% and they will continue to use their emissions as a lever to achieve that.

About Trader Joe

Trader Joe is an AMM-based decentralized exchange platform on the Avalanche blockchain. In addition to being an AMM, also integrates a number of features such as Yield Farming, Lending, Staking, … with the aim of becoming an aggregate platform and bringing the best experience to users.