JOE, the native token of the Avalanche-based decentralized exchange (DEX) Trader Joe, is leading a rally in DEX coins after the protocol announced modular staking: a system that gives token holders 3 independent ways to stake your possessions.
Messari data shows that the JOE token is up 7% in the last 24 days, outperforming DEX giants like UNI, CAKE, and CRV by a significant margin. The cryptocurrency was changing hands close to €XNUMX at the time of publication, which represents a decrease of two% in XNUMX hours.
“There has been demand for the token probably because of their modular involvement and the new primitive they are releasing,” Lucas Outumoru, head of research at IntoTheBlock, told CoinDesk in a Telegram chat. “The coin is relatively undervalued in terms of the revenue that the DEX produces relative to its market capitalization.”
Staking refers to the process of locking coins on a blockchain for a specified period of time to contribute to the security of the blockchain in exchange for rewards from the network.
Most DEXs supposedly add value to their currency by giving the tokens a revenue share or higher rewards for liquidity providers (LPs). However, according to Trader Joe's investor GBV Capital, these methods do not accumulate value and only act as incentives "to prevent people from dumping the token."
The investment firm said in a blog post published on Jan. 31 that value accumulation is achieved through utility, that is, by attaching as many use cases as possible to the token and, more again, introducing modularity in the DEX token. This involves dividing the system into multiple pieces so that the potential benefits of the token's multiple use cases are unrelated.
“People want their DEX tokens to be modular in their function and they want to price those functions independently,” GBV Capital noted. "That's exactly what Trader Joe does."
modular arrangement
Trader Joe's modular staking structure includes three separate staking pools, which can be accessed with three different tokens: rJOE, sJOE, and veJOE. Users can get each of these coins by staking the JOE token.
rJOE, a non-transferable token, is a gateway to Rocket Joe, a launch pad that facilitates better liquidity acquisition and price discovery for new projects on the Avalanche blockchain. According to the official blog, the dashboard addresses issues such as bot-managed DEX token listings and price manipulation seen in a low-liquidity environment.
Rocket Joe launched on February 1. Users can now stake JOE for rJOE and deposit the latter into a launch pool in exchange for tokens from liquidity providers at launch time.
Trader Joe plans to launch sJOE and veJOE later this month. Users can bet on JOE for sJOE and get a share of Trader Joe's revenue. Similarly, users can bet JOE on veJOE and earn higher profits. “veJOE holders can increase their JOE yield farming rewards by up to 150% (two5X),” stated the official explainer posted last month.
Essentially, modular participation allows users to choose between three participation groups or various combinations of the three. New tokenomics has retired the original xJOE staking mechanism from Trader Joe.
“They split the share of protocol fees, increased returns and access to the launch pad – normally it all comes together in one share token,” said Henrik Andersson, co-founder and chief investment officer of Australian asset investment firm cryptocurrencies Apollo Capital, CoinDesk said in a LinkedIn. chat. "While this is definitely something new and interesting, it's still too early to gauge its eventual success."
While the JOE token has outperformed DEX heavyweights over the last seven days, the platform trails behind Curve, PancakeSwap, and SushiSwap in terms of total revenue earned.
Trader Joe raked in €4 million in sales in 7 days, second only to SushiSwap with a total of €6,1 million.