Trader Joe, the largest decentralized exchange (DEX) on proof-of-stake blockchain Avalanche, has launched on Ethereum mainnet.
The pseudonymous Fish, co-founder of Trader Joe, told Blockworks that the DEX’s decision to launch on Ethereum now was driven by the opportunity to capture the stablecoin markets on the network amid the upheaval around Curve.
Curve, a well-known stablecoin DEX, suffered an exploit this week that saw over $70 million in various digital assets attacked due to a bug in Vyper, the coding language used by Curve.
This latest exploit has led many liquidity providers to sell their holdings of CRV, Curve’s native token. At the time of writing, CRV currently has a token liquidity of $6.75 million, a significant dip from $70.42 million before the hacks.
“LPs (liquidity providers) are moving to other pools, so you’re seeing a lot of volume go to other DEXes,” Fish told Blockworks. “We want to join and put ourselves into that mix.”
Capturing the stablecoin market
Fish notes that Trader Joe’s initial plan was to deploy on Ethereum in a month or two, around the beginning of Q4, after working on improving its auto pool technology.
“But this opportunity came up, and we felt this is the best time to deploy,” he said.
Auto pools are designed to help automate the balance of liquidity for users passively.
“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.”
Luckily, managing positions in a stable stablecoin market is relatively simple, Fish said.
“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.”
Trader Joe’s initial launch on Ethereum will include stablecoin pools USDC/USDT and USDC/DAI.
How Trader Joe compares to Uniswap
Like Uniswap v3, Trader Joe is a concentrated liquidity AMM, providing constrained liquidity within a tight range for its users.
Compared to its competitor, its unique edge is that it offers dynamic fee components, Fish noted.
On Uniswap v3, liquidity providers are offered three fee tiers, ranging from 0.05%, 0.3% and 1%.
By contrast, on Trader Joe, there is a base fixed fee and a variable component which is dependent on the volatility within the past few seconds to minutes.
Trader Joe is currently deployed on Avalanche, Arbitrum and BNB chains.
According to data on DeFiLlama, Trader Joe has a $57.45 million TVL on Avalanche, making it the largest DEX on the network.
On Arbitrum, however, it sports a TVL of $31.9 million, a significantly less amount compared to Uniswap v3, which currently reports volumes of $261.7 million.
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