Announcing zJOE Buybacks

Vector Finance
3 min readSep 18, 2023

Vector Finance is setting new standards in the DeFi space by consistently delivering exceptional yield and utility for our users. Today, we’re excited to provide an update on our zJOE program. First, we’ll summarize the recent changes to how zJOE works, and then discuss our new buyback program for zJOE that promises substantial benefits for our VTX locker holders and long-term zJOE stakers.

How zJOE Works: Liquid Staking for Real Yield

As you may recall, the termination of Trader Joe’s veJOE program led to the end of our own veJOE initiative using zJOE. Since then, we have pivoted the zJOE program to become a first-of-its-kind Liquid Staking Token for JOE that yields USDC rewards.

Our LST Product: zJOE

The cornerstone of our overhaul is a state-of-the-art LST designed to maximize yield for our stakers. The JOE tokens backing zJOE are now staked in Trader Joe’s sJOE pool, which earns USDC across various chains — whether it’s Arbitrum, Avalanche, or others. Using Layer Zero technology, Vector Finance automatically manages the most profitable staking opportunities, as well as bridging and fees. The yield from these staked JOE tokens is then distributed on the Avalanche network.

Unveiling the zJOE Buyback Program

In our original announcement about changes to zJOE, we mentioned creating a buyback plan. Since then we’ve weighed different possibilities, in order to guarantee long term zJoe holders a return on investment and LVTX holders value. Over the past several weeks, the Vector Finance team has activated this buyback program to maintain a floor price for zJOE. (We won’t disclose the specifics of the floor price to prevent arbitrage opportunities.)

When the zJOE-to-JOE ratio in the liquidity pool falls below a predefined threshold, the protocol will use JOE from the sJOE pool to purchase zJOE. We stake the surplus zJOE for VTX lockers and burn the rest, raising the ratio of zJOE to JOE in the pool. The excess yield we gain from this buyback opportunity means a constant stream of USDC for VTX lockers. Note: this buyback program can be stopped at any time. We’ve implemented it temporarily and will assess its ongoing effectiveness as time goes on.

Example Buyback

An example here may help: Right now you can purchase ~1500 zJOE using 1000 JOE. Using the protocol buyback system we’d buy those zJOE, burn 1000 of them, and stake the 500 zJOE, acquiring them for the protocol (VTX lockers). These 500 zJOE will generate real USDC yield forever for VTX lockers.

Initial Results

Our buyback bot has been operational for several weeks, and the initial results are encouraging (moving the ratio from a low of 0.295 JOE per zJOE to the current ratio of ~0.65). We have observed an improved zJOE-to-JOE ratio in the liquidity pool, benefiting both long-term zJOE holders and VTX lockers.

Benefits for Stakeholders

  • For zJOE Stakers: a floor price, and asset appreciation
  • For VTX Lockers: ongoing real USDC yield

Conclusion

Vector Finance is thrilled about what these updates mean for our community. Through a robust zJOE program and a strategic buyback initiative, we are improving yield, liquidity, and long-term value for all stakeholders.

We remain committed to staying at the forefront of DeFi innovation. Our team continues to explore additional initiatives to further enhance yield and utility for our users. Join us in this exciting journey using the links below.

About Vector Finance

Vector Finance is the number one yield booster on Avalanche. We’re building unique DeFi strategies to for our users to earn more on their assets!

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