The largest DEX on the proof-of stake blockchain Avalanche has been launched on Ethereum’s mainnet.
According to Blockworks, the pseudonymous Fish (co-founder of Trader Joe) told Blockworks the decision for the DEX to launch now on Ethereum was driven by an opportunity to take advantage of the stablecoin market on the Ethereum network, despite the turmoil surrounding Curve.
Curve, an established stablecoin DEX suffered a hack this week, which resulted in the loss of over $70,000,000 in digital assets. The bug was in Vyper – Curve’s coding language.
Many liquidity providers have sold their Curve native token, CRV due to this latest attack. At the moment of this writing, CRV’s token liquidity is $6.75 Million, a dramatic drop from $70.42 Million before the hack.
“LPs (liquidity providers) are moving to other pools, so you’re seeing a lot of volume go to other DEXes,” Fish tell Blockworks “We want to join and put ourselves into that mix.”
Stablecoins: capturing the market
Fish notes that the initial plan of Trader Joe was to launch on Ethereum within a few months, at around Q4’s beginning. This would have been after focusing on its auto-pool technology.
“But this opportunity came up, and we felt this is the best time to deploy,” “He said”
The Auto Pools are designed to automate and passively balance the liquidity of users.
“Ethereum runs a little bit slower, it is gas intensive, and our AMMs also use a lot of gas,” Fish explained “If you’re managing positions in a concentrated liquidity AMM, which requires you to rebalance often, and make a lot of transactions every day, then for the average Joe it’s going to be very uncomfortable for him to market make.”
Fish explained that managing your positions on a stablecoin is relatively easy.
“The price of USDC and USDT isn’t going to vary that much,” “He said” “So in most cases, people can just deploy in that range and then earn fees from within that range.”
The initial launch of Trader Joe’s Ethereum platform will feature stablecoins USDC/USDT, USDC/DAI.
Compare Trader Joe and Uniswap
Trader Joe, like Uniswap v3, is a liquidity-concentrated AMM. It provides users with constrained liquidity in a narrow range.
Fish stated that its competitive advantage is the dynamic fees it charges.
Liquidity Providers can select from three fees tiers: 0.05% (0.3%), 0.3% (1%) and 1% (1%).
On Trader Joe there are two fees: a fixed base fee, and an additional variable charge that is dependent upon the recent volatility.
Avalanche and Arbitrum chains, as well as BNB are currently using Trader Joe.
DeFiLlama data shows that Avalanche is Trader Joe’s largest DEX, with $57.45M TVL.
Arbitrum has a TVL that is $31.9m, which is a significant amount less than Uniswap v3’s current volumes of 261.7m.
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