3 - 4 minute read
Trader Joe’s V2 platform on Arbitrum, launched on February 1, 2023, has propelled the exchange to the top five decentralized exchanges based on trading volume. Joe’s Liquidity Book (LB) model, which competes with Uniswap’s V3 liquidity model, enables Liquidity Providers (LPs) to enhance capital efficiency while providing zero-slippage, better flexibility experience for them.
Trader Joe has made it to the second rank after Yash, a power DeFi-user, praised its innovation for transpiring organic growth. However, the competition has risen significantly after the expiry of the Uniswap V3’s code license. PancakeSwap, the leading DEX on Binance Chain, is reportedly one of the first teams to fork Uniswap’s model for trading desks on BNB Chain (BNB), Aptos (APT), and Ethereum-based blockchains.
Trader Joe’s Liquidity Book (LB) model powered 15.7% of all ARB trades on-chain in the first seven days of launch. The LB model enabled LPs to add liquidity in designated price bins, which significantly augmented capital efficiency.
The project has also launched the Liquidity Incentive Program to boost deposits for ARB, ETH, and USDC trading. The program received a good response, and 300,000 JOE tokens worth around $171,000 were rewarded to its promising contributors. The incentive program ends on April 6.
Trader Joe’s Price Analysis
A Delphi report estimated a price-to-earnings ratio (P/E) to reach between 15.5 and 7.5 for sJOE token holders after the launch of V2.1, expected by the second week of April. A P/E ratio lower than 15.2 would place Trader Joe in the top fifteen protocols concerning real earnings for token holders.
The P/S ratio, calculated by dividing the fully diluted market capitalization of a token by its annualized revenue for token holders, is higher than 15 for popular DeFi protocols like dYdX, SushiSwap, and Convex Finance, but sJOE token’s P/S ratio is lower than 15. The price of JOE token has broken out of its deep slumber from last year, progressing with the LB design and adopting additional platforms beyond Avalanche. The token currently eyes upside toward the 2022 breakdown levels around $1.01 and January 2022 high of $1.52.
Takeaway for Traders
Trader Joe’s innovation and its LB model have propelled the exchange to the top five DEX list in terms of trade volume. Its organic growth is a significant testimony to its users’ confidence, causing it to outpace some of its rival DEXs, including Uniswap. As traders look for good investment opportunities, the article indicates Trader Joe’s JOE token is one to consider.