Nov 25, 2021
Our JLPs Degenbox Strategy!
With the launch of our Degenbox, Abracadabra can now enhance the yield on interest-bearing and LP tokens collaterals! Let’s dive into the strategy for JLP tokens on Avalanche!
The Strategy
The JLP Strategy is out first auto-compounding LP strategy on Avalanche! It will work for all of our Stable/AVAX JLPs markets!
No matter if you prefer AVAX/MIM, AVAX/USDT.e or any other market, the strategy will be the same!
Here is an explanation on how it works and how it benefits our users! Before starting, make sure to read how Abracadabra Lending Markets and Leveraged Positions work here.
Step 1: The Cauldrons
Users join one of the available JLP markets (either simply depositing collaterals or leveraging their JLP positions). No matter what they choose, as long as they have a deposited JLP balance, they will receive rewards from the strategy!
Step 2: Degenbox
As all of our JLP cauldrons are built on top of Degenbox, Abracadabra can use the user’s deposited JLPs to produce yield. For this strategy, we are depositing the JLPs into Trader Joe Farming contract, and farm JOE with it! Approximately once per day, the JOE rewards are harvested and collected. Note that a 10% cut is taken as a management fee, and treated as protocol revenue (i.e used in sSPELL buybacks)!
Step 3: Distributing Rewards
The farmed JOE are then automatically compounded back into new JLP tokens, that are then redistributed to every Abracadabra user of the cauldron, proportionally to their deposited amount!
And just like this, our JLP cauldrons strategy is now live! Note that from now on, users will see their JLP collateral increase in quantity, not only in value!
The best thing about it is that there is no need to migrate your collateral. If you had a position already open in one of the JLPs markets, you are already earning additional JLPs rewards!
Withdrawing JLP tokens
Our strategies keep approximately 85% of the JLPs in Trader Joe farming contracts, and 15% in Degenbox to allow users to withdraw smoothly! As a consequence, the amount withdrawable is limited.
Once this limits approaches zero, new JLPs are unstaked and withdrawals are again available!
You can check the amount Available to be withdrawn in the “My Open Position” box, under “Withdrawable Amount”.
