zJOE: Leveraging LayerZero Technology for Seamless Cross-Chain DeFi

Vector Finance
4 min readOct 16, 2023

Introduction

As decentralized finance continues to evolve, the complexity of navigating yields, staking pools, and cross-chain transactions has risen exponentially. Recognizing this dilemma, Vector Finance developed zJOE, our liquid staking token designed to revolutionize how you interact with staked JOE tokens. The cornerstone of this advancement lies in the use of LayerZero’s technology, which simplifies and automates the cross-chain yield process. In this blog post, we’ll dig into the specifics of zJOE and the groundbreaking utility of LayerZero in its functionality.

What is zJOE? Your Ticket to Hassle-Free Yield Farming

Liquid Staking

zJOE acts as a proxy for your staked JOE tokens on the Vector Finance platform. When you convert your JOE into zJOE, the following happens in the background:

  • Vector automatically identifies the best yield opportunities for Trader Joe’s sJOE pools
  • Your JOE tokens are transferred to the protocol for handling and you receive zJOE tokens for staking
  • Your JOE tokens are bridged (when necessary for the best yield) and staked into sJOE pools on Arbitrum and Avalanche

Automated Yield Maximization

The algorithm behind zJOE does the heavy lifting. It seeks out the best yield by bridging your staked JOE tokens (sJOE) to the optimal pools and then automatically bridges the USDC rewards back to the Avalanche chain, ready for you to claim.

Earning Rewards with Trader Joe

On Trader Joe, staked JOE (sJOE) earns USDC rewards through trading activity. Trader Joe is a cross-chain platform that supports pools on both Arbitrum and Avalanche, with more pools to come.

The Dilemma of Traditional Methods

Users who don’t utilize zJOE face several challenges when staking in the sJOE pools:

  • They must spend time researching which sJOE pools yield the highest rewards.
  • They have to predict future pool performance.
  • The need to manually bridge their JOE tokens and stake them cross-chain.
  • A constant juggle to migrate assets for better yield.

How LayerZero Technology Powers zJOE

Utilizing LayerZero technology, Vector Finance manages to execute a series of complex actions in one single transaction to make zJOE work. Here’s a step-by-step explanation of what happens when a user calls the ‘harvest’ function on Vector:

Step 1: Harvest on AVAX

The sJOE rewards on the Avalanche chain are harvested.

Step 2: Swap for Gas

A fraction of the harvested rewards is swapped for AVAX tokens.

Step 3: Call on Arbitrum using LayerZero

That AVAX is then used as gas to call the ‘harvest’ function on the Arbitrum chain using LayerZero.

Step 4: Harvest on Arbitrum

The Arbitrum contract then harvests the sJOE rewards on that chain.

Step 5: Bridging Yield Back

The Arbitrum contract uses its bridge to transfer the harvested yield back to Avalanche.

Step 6: Reward Distribution

Finally, the yield is sent to Vector’s reward pool, where users can claim their share.

Why is LayerZero Groundbreaking?

LayerZero allows for gas-efficient, simultaneous interactions across multiple chains. It’s a technological marvel to see this executed so flawlessly in one transaction. This has led the Vector team to strongly consider incorporating LayerZero technology in future cross-chain products.

Using zJOE for automated yield maximization

Want to try out our Liquid Staking Token for JOE yourself? It’s incredibly easy to get started! You’ll need JOE in your wallet to start. Head to the Vector Finance site and connect your wallet. After you’re connected look for the JOE pool at the top and click on it. Approve how much JOE you’d like to convert, then use the convert and stake option to do it in one transaction. Your JOE will be converted to zJOE on the protocol and then stake to immediately start earning yield! We use our Smart Converter on the site to make sure you get the best ratio possible by routing conversion first through the zJOE liquidity pool. Now you’re maximizing your yield and can claim the next time rewards are harvested using LayerZero technology!

Conclusion

Vector Finance’s zJOE not only simplifies but also automates the DeFi yield generation process across chains. This efficiency is amplified by the pioneering use of LayerZero technology, making it a unique and forward-thinking solution in the DeFi ecosystem. As Vector’s first application of LayerZero, we are incredibly optimistic about its role in our future cross-chain offerings.

The age of fragmented, complex yield farming is over. Welcome to the future, powered by Vector’s zJOE and LayerZero!

About LayerZero

LayerZero is an omnichain interoperability protocol designed for lightweight message passing across chains. LayerZero provides authentic and guaranteed message delivery with configurable trustlessness.

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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