Tokenomics Update: veJOE

TLDR

• veJOE will be sunset

• Users can withdraw JOE tokens from veJOE

• Emissions to V1 yield farms will cease by or before Jan 2024 (emissions schedule)

veJOE

In January 2022, we announced veJoe in our tokenomics overhaul. At that time, two features were announced: the ability to boost farms and the potential for future governance voting power. The immediate goal was to incentivize yield farmers to stake Joe so they could accrue veJOE which would then allow them to earn more Joe from participating farms.

veJOE was officially launched in March 2022 and saw immediate success, with adoption that amounted to 38m JOE tokens staked and integration from a number of yield aggregators, namely Vector Finance, SteakHut Finance and Yield Yak.

Changing Times

By Spring 2022, the trend of protocols started to shift to ‘real yield’ and away from emissions fuelled yield, driven by the global economic backdrop at the time. It became clear that transitioning to an emissionless operation was the best direction for the protocol and token holders to ensure long-term survivability. The ideation of Liquidity Book was born in late-spring of 2022 and after a period of building over the summer, the idea of an emissionless AMM was realized. Liquidity Book was launched in mid-November of 2022.

Liquidity Book

Since launching Liquidity Book >95% of trading volume is supported with Liquidity Book Pools. In light of this, it is no longer a prudent endeavour to continue sending emissions to reward liquidity in V1 Yield Farms, as V1 pools are no longer generating trading volume to offset the cost of rewards from emissions. Since launching Liquidity Book, emissions being directed to V1 yield farms have been reduced a number of times. This naturally raises questions about the future use of accruing and holding veJOE.

veJOE is therefore at a point in its product lifecycle, where it either needs to evolve with a new use-case for the Liquidity Book ANN, or remain as a V1 yield farming booster that eventually tapers off with emissions.

veJOE Decision

After much ongoing consideration, including counsel with key partners that have built on veJOE, the Trader Joe Core Team have decided to sunset veJOE. This means that veJOE will not be adapted for Liquidity Book. veJOE will remain as a V1 yield farm booster but with the expectation that emissions sent to V1 yield farms will cease ahead of the planned emissions schedule that ends in January 2024.

Closing Words

We thank our community for their trust and ask for your continued support as our team makes bold decisions for the long-term sustainability of the protocol, even if it means deviating from previous plans.

The future of JOE will be evergreen. Sustainable, highly accessible, free of tokenomic complexities and truly, an ultrasound token.