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How Trader JOE works

Welcome to this post, where we are going to see how trader joe works and all it has to offer. With the great growth it has had, along with the token of its network, avalanche.

Trader Joe has become the most used DEFI Exchange in the Avalanche network, surpassing pangolin, thanks to its great development and offering better options to its users than pangolin. Thus, being the Exchange reference of the Avalanche network. So, let’s see what you can find in this platform, and how to make the most of it.

Before going into more detail, mention that it is possible that at the time you read this post, the platform is different, or has different % in aspects of profitability, so I recommend you always enter the platform itself once you have finished the article to see what has today trader joe.

What is Trader Joe

Trader Joe is their decentralized trading platform on the Avalanche network. Where they combine DEX services with DeFi lending to offer leveraged trading. Besides being a decentralized Exchange like pangolin, it offers more complex and advanced trading options for more experienced users, with options to use leverage in a decentralized way, thanks to its built-in lending & borrowing platform.

If you know other platforms on DEFI, trader joe is a combination of pancakeswap and Aave on the Avalanche network. Where you have options to exchange your cryptocurrencies for another on the avalanche network in a fully decentralized way. And a loan market, to place your cryptocurrencies in exchange for an annual %, or borrow paying an annual %, and be able to use leverage.

In addition to the staking and farming options of LP Tokens to generate an annual % with your cryptocurrencies. Now, let’s take a closer look at how each aspect works.

How to get started

To use trader joe, as it is on the avalanche network, you can use the metamask wallet, which is the most commonly used. You will need to configure the avalanche network, in settings, networks, add new and enter the following information:

Network Name: Avalanche Network

New RPC URL: https://api.avax.network/ext/bc/C/rpc

ChainID: 43114

Symbol: AVAX

Explorer: https://snowtrace.io/

With the network added to metamask, and selected, the next step is to send Avalanche (AVAX) to your wallet to be able to pay for the commissions, which are really low, and be able to use the network. For this, I leave you a guide here on how to do it.

Remember to withdraw using the AVAX network (C-CHAIN) in Binance or any other Exchange to receive your cryptocurrencies in the right way. In case Binance does not allow withdrawals, I recommend you to use KuCoin or Gate.io. With this done, we can start using trader joe.

Trade

To enter trader joe, click on the top right on connect wallet, confirm in your metamask wallet and that’s it, you will have your wallet connected to use.

The first thing we find and is the main part, is the trade. Where we can exchange any cryptocurrency of the avalanche network if it has liquidity in trader joe. To do this, above we will indicate in from the cryptocurrency we want to use, and in to, the cryptocurrency we want to get. You can search for the cryptocurrency if you click on it, and indicate the name.

In case you do not find the name, you should copy the contract of the cryptocurrency, to see if it detects it. To do this, go to coingecko or coinmarketcap, and there look for the cryptocurrency you want to buy. You will see that in the cryptocurrency’s file, a contract appears, with the avalanche symbol, some numbers and letters. Click there and copy it. Go back to trader joe and paste the contract, and it should detect the token.

With the tokens indicated, the next thing is to indicate the amount you want to use, and below you will see what you will receive from the other cryptocurrency. Click on swap, confirm swap and confirm in your wallet. This way you will have already swapped tokens. Look at the top right in from and balance, if you click there you will open the settings. Check that the slipping tolerance is at 0.5% or 1% to avoid large price fluctuations.

With this, you will be able to exchange any cryptocurrency for another from the avalanche network. Sometimes the swap may fail, just click swap again, confirm swap and confirm in your wallet until the transaction is done.

Pool and Zap

In Pool you can find the different LP Tokens for farming within trader joe, with the liquidity, the 24 hours volume, the commissions in the last 24 hours, and most importantly, the annual % or APR that you will receive for providing liquidity in that LP Token.

Here, you will be able to find the main pairs of the avalanche network, and thanks to the zap you will be able to create them very quickly. The zap is a faster way to create a lp token with the tokens you have in your wallet. Click on zap, and in from indicate the cryptocurrency you want to use to make the LP Token.

In to, indicate the LP Token you are interested in creating to provide liquidity. Indicate the amount, click on approve the token if you have not approved it, sign in your wallet, and click on zap. Confirm in your wallet and you will have your lp token, without the need to put 50% of each token, since, in the zap, it is done directly to save you steps and go faster.

You can click on create a pool, to create the LP Token as in other platforms. If you do not know what LP Tokens are, or the risks they have as the impermanent loss, I recommend you to read this guide, to avoid surprises.

Farm

In farm we find the different LP Tokens and unique tokens, in this case XJOE, where you will receive rewards for placing them here. Currently, avalanche has launched an incentive for their network, and trader joe is offering rewards from joe and avalanche for placing your liquidity here.

With this double reward bonus, really the annual % you get are quite interesting, although it is important to know that the avalanche protocol incentives, in a while will disappear. But if they are still available, it’s a great opportunity to get avalanche and joe tokens at the same time.

You will be able to see LP tokens with double rewards, and others that don’t have them. The most important thing is to look at the APR that each LP Token offers you, and see which one can be the most interesting, taking into account the impermament loss. To place it, simply click on the LP you are interested in, once created, click on stake, the amount you want to place, stake, confirm in your wallet and you will start receiving rewards for staking your cryptocurrencies here. You can click on harvest to withdraw the rewards generated at any time.

Lending

In lending we find the lending part that trader joe has incorporated, and that currently also has the avalanche rush bonus, where you receive avalanche rewards for using this part of the platform.

The operation is very simple, and the same as other protocols such as Aave, where you can place your cryptocurrencies for someone else to borrow them in exchange for an annual percentage. You can see this annual percentage in deposit APY, and in rewards APY is the % that they are giving for the avalanche rush, which is the incentive of the network so that more people use avalanche. It must be taken into account that the rewards APY will be reduced over time until it disappears.

On the other hand, we have borrowing, where you can borrow by placing collateral paying the annual % that you can see in borrowing APY. Even so, the platform gives you rewards in rewards APY also for borrowing, so with the rewards, the net % you end up paying is lower.

Keep in mind that to borrow, you must first place cryptocurrencies as collateral, and regarding their value, you can borrow a certain amount, always taking into account the risk of being liquidated if for example, you have placed Avalanche, and its price has decreased. So know the risks well before borrowing and end up losing your funds by liquidation.

Stake and XJOE

In stake, you will be able to staking JOE the native token of the platform. Where they are currently paying 27% per annum. One of the most interesting aspects of trader joe, is XJOE.

This token, we can buy it with JOE, and receive a % of the commissions that the platform gets. In addition, you can staking XJOE on farm, and get an extra annual %. You can exchange JOE for XJOE, and when you want to exchange your XJOE for JOE. Taking into account that XJOE appreciates with respect to JOE, by increasing its value with a % of the commissions generated on the platform.

This means that the longer you have your XJOE, the more JOE you will receive in exchange once you want to exchange it again. It is a very interesting system that we have seen in other very successful platforms such as sushiswap.

I hope this guide has helped you to know in more detail the Exchange nº1 of avalanche. Remember that, if you don’t have an account with binance, just below you will be able to create one.

Platform: Binance
Min. deposit: $10
License: Cysec

Very low commissions
Exchange with more cryptocurrencies

5/5

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