Is Trader Joe (JOE) A Hidden Gem Poised to Outperform Uniswap (UNI)?
12 Diciembre 2023 - 10:00PM
NEWSBTC
In decentralized finance (DeFi) and trading, Uniswap has long
reigned as a dominant force. However, a recent analysis by Lark
Davis, a Bitcoin (BTC) investor, seems to suggest Trader Joe, a
decentralized exchange (DEX) on Avalanche–a highly scalable
blockchain and Ethereum’s competitor, could eventually emerge as a
formidable competitor, even overtaking Uniswap. Is Trader Joe
Undervalued Relative To Uniswap? In a post on X on December 12,
Davis noted a discrepancy in the relative valuation between
JOE and UNI, which serve as governance tokens of Uniswap and Trader
Joe. Specifically, the investors noted that Trader Joe’s handles
around $300 million daily trading volume on Avalanche alone. On the
other hand, Uniswap processes approximately $1.6 billion in daily
volume across the Ethereum mainnet and Arbitrum, the largest
layer-2 platform by total value locked (TVL) by Ethereum. Related
Reading: Bitcoin Speed Bump: A Week’s Surge Crumbles In Just 20
Minutes Davis further noted that despite this “small” difference in
trading volume, Trader Joe’s has a market capitalization of only
$238 million. Meanwhile, Uniswap has a market cap of $3.6 billion,
according to CoinMarketCap data. Even with relatively narrow
average trading volume, the huge difference in market
capitalization suggests that JOE is significantly undervalued
relative to UNI. Accordingly, this gap will likely be narrowed in
the future, with JOE appreciating versus UNI, possibly benefiting
holders. JOE Yields Versus UNI’s Governance: Which Token Has An
Edge? Davis also pointed out JOE’s potential, saying the token
rewards holders with USDC yields. This is different from UNI, where
holders can vote on proposals and nothing else. In the investor’s
preview, besides the undervaluation, this feature could further
enhance JOE’s appeal, even contributing to its upside
potential. Related Reading: Crypto Analyst Predicts Cardano
Price Will Rise 6000% To $33, Here’s The Timeline As the crypto
market recovers, Avalanche might also present additional advantages
to traders and, therefore, Trader Joe. The modern blockchain is
scalable and has relatively low fees regardless of network
activity. With crypto prices expanding, Ethereum gas fees have been
rising in tandem, discouraging mainnet transfers. This has rerouted
activity to layer-2s like Arbitrum and competing platforms,
including Avalanche. When writing on December 12,
DeFiLlama data shows that Trader Joe has a TVL of $149
million, of which most assets are tied to Avalanche. Only $1
million is on Ethereum. JOE has been on an uptrend, rising 170%
from October 2023 lows. The token is cooling off, looking at price
action on the daily chart. Feature image from Canva, chart from
TradingView
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