With the launch of our Degenbox, Abracadabra can now enhance the yield on interest-bearing collaterals! Let’s see its first application on our xJOE market! Read more about what xJOE is here.
Please note: due to the migration of TraderJoe’s farm, this strategy is no longer active!
The Strategy
Let’s dive into our first Degenbox Strategy on Avalanche, how it works and how our users can benefit from it! Before starting, make sure to read how Abracadabra Lending Markets and Leveraged Positions work here.
Step 1: The Cauldron
Users join the xJOE market either simply depositing collaterals or leveraging their xJOE positions! No matter what they choose, as long as they have an xJOE balance deposited, they will receive rewards from the strategy!
Step 2: Degenbox
As the xJOE cauldron is built on top of Degenbox, Abracadabra can use the user’s deposited xJOE to produce yield. For this strategy, we are depositing the xJOE into Trader Joe Farming contract, and farm JOE with it! Once per day, 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 staked in Trader Joe turning them into xJOE. The obtained xJOE are then redistributed to every Abracadabra user of the cauldron, proportionally to their deposited amount!
And just like this, our xJOE strategy is now live!
The best thing about it is that there is no need to migrate your collateral. If you had a position already open in that market, you are already earning xJOE rewards!
Note that from now on, users will see their xJOE collateral increase in quantity, not only in value!