Jones DAO: Best Yields & Vault Strategies Revealed by Notum

Jones DAO: Essentials

• TVL:  $30.48M
• Market Cap: $4.67M
• Average APY: 57.44%
• Chains: Arbitrum, Ethereum

Jones DAO provides vaults enabling 1-click access to institutional-grade strategies. These strategies open up liquidity and capital efficiency for DeFi through yield-bearing tokens.

Source: DefiLlama

Jones DAO addresses their vaults for:

• Users who don't want to be actively involved in their strategies and looking for ways of utilizing the strategies deployed by the vaults.
• Crypto investors who don’t want to lock their tokens, but rather keep their tokens liquid.
• Protocols that aim to earn extra yield on their treasury positions.

Q: Obviously, the DeFi market is full of interesting and beneficial projects, so how did you choose to stand up in that flourishing diversity?

 

A: Our killer features are derived from two things: our big-brain strategy team and our ability to listen closely to our community. Our community, and the greater crypto ecosystem, acts as a sound board when we assess and iterate on new strategies. 

Every strategy starts from a first-principles method where the end goal is creating something that solves a problem or simplifies a complicated process for users.

Our killer features include composability, ease of access, and thoughtful incentive design.

What Are the jGLP & jUSDC Vaults?

jGLP and jUSDC vaults deliver transparent and substantial leveraged yield to crypto investors. They work in synergy to maximize the yield generated by GLP for depositors.

• jGLP: Smart Leverage on the underlying GLP rewards rate.
• jUSDC: Transparent USDC yield without the inefficiencies of competing methods.

Source: Jones DAO

Both vaults have optional auto-compounding. Auto-compound feature allows users to mint the jGLP and jUSDC receipt tokens. The jGLP vault gains yield in ETH, while the jUSDC vault gains yield in USDC.e. Jones is upgrading this vault to only be USDC soon.

Q: Have you shifted permanently from automating options strategies (Dopex) to perpetual DEX trading (GMX)? 

 

A: We haven't really taken a solid stance on any specialty for the protocol. For Jones, the way we assess the value of creating something is whether or not the outcome will:

a.) Solve a user's problem;

b.) Generate the best yield;

c.) Bring more users and sticky liquidity to the protocol.

While we found amazing success with our jGLP & jUSDC strategies, which are based on GMX, we still study options for potential future strategies. Jones also has a keen interest in building strategies around Uni V3 liquidity, vote incentive markets, and risk tranching, only where the outcome provides a best-in-class strategy for users.

How Do They Work?

The jGLP and jUSDC vaults work hand-in-hand. They work together to accomplish the following:

1. Users can deposit GLP or any GLP basket token into the jGLP Vault, and Arbitrum-bridged USDC.e into the jUSDC Vault.
    
2. The jGLP Vault borrows USDC collateral from the jUSDC Vault to mint more GLP, gaining leverage on its GLP position.
    
3. The jGLP Vault delivers multiplied and transparent yield to depositors.
    
4. The jUSDC Vault accrues USDC yield by receiving a portion of the yield from the GLP strategy built on its collateral.

The jGLP Vault only borrows from the jUSDC vault without interacting with any other leverage sources. jGLP provides exposure similar to the broad crypto market (i.e ETH, BTC, etc.) while earning multiples of the base GLP yield. 

@JonesDAO_io

jGLP uses Smart Leverage, developed with extensive backtesting, to automatically rebalance within an algorithmically determined range. jUSDC provides leverage to jGLP enabling a consistent stream of transparent USDC yield for depositors.

Q: Talking a bit more on vaults, how do you see your target audience? Who are they?

 

A: Our target audience for vaults are degen holders who want to maximize their yield, or users with a less complex understanding of DeFi who don't want to figure out a strategy for themselves. 

Jones is also a great option for protocols who want to build on top of us, or use Jones strategies to optimize their treasury & protocol-owned liquidity. Simplicity & effectiveness are key for Jones success.

 jUSDC is a receipt token, meaning its redeemable value changes over time.

Benefits & Use Cases

Benefits 

What are the main benefits of investing in these vaults? Here are some of them:

• Increased jGLP yield streams bring investors enhanced yield.
• jUSDC creates an ideal source of USDC yield on top of a battle-tested yield source, GLP.
• The jUSDC’s architecture is superior to competing designs and avoids the ineffectiveness of “delta neutral” stablecoin yield strategies on the DeFi market.
• The synergy of jGLP and jUSDC provides users with optimal approaches to generating yield in both risk-on and risk-off markets. 
• Both strategies remain composable; they can be utilized across different DeFi protocols for various outcomes depending on the needs of a holder.

Q: Are you currently developing new vaults, or are you focused primarily on Jones Labs development for now?

 

A: We are currently developing a GMX V2 strategy, and options strategy called Metavaults V2 (a revamped version of a currently deprecated vault strategy), plus full-blown automated liquidity strategies based on Uni V3 architecture.

Jones Labs is a stepping stone for some of those strategies to become fully fleshed out Jones vaults.

Use Cases

Let’s have a look at where and how to use the vaults:

• jGLP is the new standard for risk-on yield generation; users can maximize their yield while maintaining approximate exposure to the broad crypto market.
• jUSDC offers risk-averse users a superior source of USDC yield in all market conditions.
• jGLP & jUSDC serve as an ideal pair of tokens for productive treasuries of all sizes.

Find out more about full technical details of  jGLP & jUSDC vaults in the Whitepaper.

Q: Are there plans to extend the usage of jAssets among Dapps beyond Camelot LPs?

 

A: Absolutely! While Camelot has been a great partner and a long-time supporter, we do plan to make many more protocol expansions in the coming year. In fact, there are already a few available!

If you use jUSDC, there is a very robust lending market ecosystem for that token strategy. You can use Dolomite & Savvy to lend & borrow, as well as Rodeo to gain leverage on your jUSDC tokens. Our jAURA strategy also uses a few protocol collaborations. If you hold wjAURA, you can pair it with ETH in an 80-20 Balancer pool and earn rewards from staking your BPT.

jAURA Explained

jAURA is an auto-compounding strategy on Ethereum Mainnet that helps crypto investors to earn yield on their AURA tokens. Over time, each jAURA token will become backed by more underlying vlAURA.

jAURA works by using 3 separate protocols:

 

• Aura Finance;
• Balancer;
• Redacted Cartel’s Hidden Hand.
   

Source: Jones DAO

These integrations allow users to collect yield automatically, without the hassle of having to sell tokens, lock positions, or vote in bribe rounds themselves.

Why jAURA?

Source: Jones DAO blog

It was implemented for AURA holders as the easiest, most effective way to grow their AURA balance.

Structure of jAURA

The jAURA strategy exists in two forms:

1. A non-tokenized auto-compounder;
2. A tokenized liquid staking derivative (LSD).

The non-tokenized auto-compounder jAURA accrues higher yield on average because it is not subject to liquidity incentives, but at the cost of no composability.

The tokenized LSD gives you the receipt token wjAURA when depositing. This vault does auto-compound, but is subject to liquidity incentives which may bring slightly lower yield than the non-tokenized strategy. 

However, wjAURA tokens are fully composable, meaning they can be used outside of the Jones protocol, in other DeFi protocols.

Security Issues: How Secure Jones DAO Is?

Jones DAO Vault contracts are audited. However, no matter how thoroughly smart contacts are checked and tested, there is always a slight chance for exploits. Remember a must of any investor — Don't invest more than you’re comfortable to lose.

Source: SourceHat

• OpFi Vaults: audit report;
• Advanced Strategy Vaults: third audit report (latest), second audit report, first audit report;
• Jones Aura: audit report.

Q: What safety issues are you applying to protect vaults from malicious intentions?

 

A: Jones is very focused on safety. In order to protect the protocol, we do not allow protocol integrations without strict whitelisting. All calls to the Jones contracts must be done through a proxy contract instead of the deployed address to reduce the chance of another protocol's exploit affecting Jones. 

All our deployed strategies go through multiple rounds of audits and are meticulously checked on a regular basis for irregularities or inconsistencies.

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Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.