Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

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Analyze the value of Trader Joe, a decentralized trading platform, through two indicators: trading volume, the ratio of fully diluted valuation and daily trading volume.

Written by: Joyce

At present, DEX has a variety of business developments. Each public chain ecology has its own core DEX, and the derivatives market also has potential. Most mainstream DEXs have expanded functions such as pledge income and lending except for the transaction function; the business capability of DEX is also judged. More complex, BixinLabs hopes to use the simplest data logic to analyze the DEX uniformly, combined with the recent vigorous development of the avalanche ecology, we aggregate DEX, pledge income, and in the future will provide Avalanche’s leading DEX-Trader for lending and leveraged transactions Joe is the subject of analysis, and his accumulated income from the agreement in September has surpassed Curve, which ranks first in the DeFi lock position, and is worthy of attention.

BixinLabs’ research methods

Screening logic: BixinLabs selects the DEX with the best recent earnings by ranking the Top 10 DEX exchange agreement income of token terminals in the past 30 days; this screening is because the agreement income is the amount paid by the user to the agreement, which is mainly provided by the underlying service The income brought by the party, the agreement income is the accumulated income brought by the token.

There are many indicator logics: DEX has business interspersed, derivatives business also does spot transactions, spot DEX also has derivatives, and even cross-chain wallets also have DEX; various cross-chain, product transaction fee definitions and ratios are not The same (some are expensive and some are cheap), direct comparison of agreement revenue is difficult to directly represent the activity and short-term increase of the agreement; it has the same problem with the research of CEX platform TOKEN, once the new business line is expanded, the income will immediately be significant Increase, the P/S ratio will also be affected by this situation.

Therefore, we have positioned two core indicators:

Trading volume

This directly represents the degree of activity of the agreement.

Generally, to measure the success of a liquidity agreement, one of the most basic indicators is the total transaction volume. For protocol participants, such as liquidity providers and currency holders, the higher the transaction volume, the greater the cash flow.

Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

The ratio of fully diluted valuation to daily trading volume (FDV/Daily Volume)

This ratio is for DEX and has the same characteristics as the market-to-sales ratio. The significance of this ratio is to measure the market’s valuation based on the exchange’s trading volume, and not to calculate the valuation of DEX based on transaction fees, because different DEX charges different transaction fees.

Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

Combining the fundamentals of the project under this method, the main points of BixinLabs’ analysis of Trader Joe are as follows:

  • The core logic of being optimistic about Trader joe is that it is a multi-functional aggregate top brand DEX of the avalanche ecology, and it is currently in the early stage of rapid growth (one month on the line), and $Joe has achieved contrarian growth in the Mid-Autumn Festival retracement market.

  • From the perspective of the growth of agreement income, the accumulated agreement income for 30 days from this week has just exceeded Curve. Currently, functions such as lending and leveraged trading have not yet been launched. According to the ratio of fully diluted valuation to daily trading volume proposed by BixinLabs (FDV/ Daily Volume), $Joe is underestimated compared to many agreements, and it has not yet developed other diversified product features such as lending.

  • From the perspective of opportunity, the project belongs to the early stage and deserves attention. It is worth paying attention to the development of the market with Avalanche, and the aggregation of multi-product dex may be more able to stimulate the growth trend of transactions. In addition to borrowing, governance voting is also worthy of attention; but it has achieved high quality in the short term. Investment from the capital, including Mechanism Capital, Three Arrows Capital, Avalanche Foundation, Delphi Digital, and Aave founder Stani Kulecho.

  • From the perspective of risk, the Vee finance, which belongs to the avalanche ecology, was stolen in the past few days. There are certain negative concerns, and as a team anonymous DeFi project, the uncertainty is high, and more information about the political economy needs to be disclosed.

  • According to the performance of the above line for only one month, the ratio of Trader Joe’s market value to trading volume is low (Fdv/trading volume), and the news is that the future good news may come from the information of some mainstream exchanges, which is suitable for following the short-term avalanche ecology. Operation, Trader Joe’s core is a one-stop decentralized trading platform on the Avalanche network.

  • Combine DEX (AMM) services with lending and provide leveraged trading. Currently, swap transactions, liquidity mining, and pledges can be performed on Trader Joe’s platform; the development of loan and leveraged trading products is still under planning; in addition, Trader Joe will also provide governance voting functions.

Trader Joe Project Introduction

At its core, Trader Joe is a one-stop decentralized trading platform on the Avalanche network. Combine DEX (AMM) services with lending and provide leveraged trading. Currently, swap transactions, liquidity mining, and pledges can be performed on Trader Joe’s platform; the development of loan and leveraged trading products is still under planning; in addition, Trader Joe will also provide governance voting functions.

In addition to the aggregation of the product’s overall business, Trader joe also has a Zap function that facilitates liquidity.

When an LP is added to become a liquidity provider, generally if there are no two trading pairs, three swaps need to be completed to provide liquidity, and Trader joe’s Zap function can convert the single-party token in hand to Two kinds of tokens, and add liquidity.

The top three products currently locked in the Avalanche Agreement are: Benqi, Trader Joe and Pangolin.

Benqi provides lending services, Pangolin provides DEX trading services, and the latest Trader Joe product launch. Benqi will go live on August 19, 2021, and pangoling will be in February 2021. When Trader joe only launched the dex function, the lock-up volume surpassed pangoling. This is due to the incentives of liquidity mining and the recent avalanche heat; if the loan service goes online in the future, there will be greater competition for benqi in the ecosystem. force.

Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

Development Plan Roadmap

Judging from the team’s plan, lending and leveraged trading products should be provided in August, but the current progress is lagging behind. Through the negative news of Vee finance’s security issues, it may be a good thing that the development of defi products lags behind.

Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

Since the core of deFi products is still based on security and capital volume, although joe has taken another approach to aggregate defi products, there is AAVE in this industry that specializes in lending; there is Uniswap that specializes in DEX, which specializes in the technical industry; but for Joe’s The optimism mainly comes from the fact that it may become the top DEX of the avalanche, and it is mainly optimistic about the defi scene of the avalanche.

Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

According to the white paper of Banker joe (trader joe’s lending product), its lending products are borrowed from Cream and Compound, and will also support some long-tail assets. The assets currently included in the support include weth, usdt, dai, avax, link, wbtc . But this way of borrowing makes the product not original and innovative .

Team and financing

In early September, Trader Joe, the Avalanche ecological DeFi protocol, announced the completion of USD 5 million token financing. Investors include DeFiance Capital, GBV Capital, Mechanism Capital, Three Arrows Capital, Avalanche Foundation, Delphi Digital, and Aave founder Stani Kulechov. The anonymous founder of the team, 0xMurloc, said that the team will expand from 15 to 20 people, while the other co-founder, Cryptofish, also remains anonymous.

Token economy

JOE is a governance token. It also rewards its holders with a share of the exchange’s revenue. The maximum supply is 500,000,000 JOE.

Trader Joe helps users earn JOE tokens by staking their liquidity provider (LP) tokens. Similar to Sushiswap, JOE tokens can also be pledged to earn more JOE through agreement fees.

In the future, users will be able to lend and borrow tokens from Trader Joe to earn income or increase trading leverage. The specific token design has not yet been announced.

Trader Joe (JOE coin) distribution

  • Liquidity provider (LP), 250 million, accounting for 50%, unspecified;

  • Ministry of Finance, 100 million, 20%, not specified;

  • Development team, 100 million, 20%, not specified;

  • Future investors, 50 million, accounting for 10%, unspecified.

Use data indicators to analyze the value of DEX: Take Avalanche Ecological DeFi Protocol Trader Joe as an example

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