Jones DAO Vaults & jAssets
"Vaults are the core Jones DAO product offering. These vaults generate yield on single-stake assets, not LP pairs by running risk averse options strategies such as options spreads."
Introduction
We have successfully launched our initial ETH and gOHM Jones DAO vaults and are excited to start shipping more products and features soon. Our community has grown rapidly and we’ve expanded our team to further achieve our vision of becoming the definitive organic yield strategy protocol in DeFi.
We’ve got some exciting developments to share in the coming weeks - follow us on Twitter and be sure to join our Discord for the latest updates with a side of alpha.
In this article we’ll be exploring what Jones Vaults and jAssets are as well as the Dopex platform that they’re built on top of.
What are Jones Vaults and how do they work?
Vaults are the core Jones DAO product offering. These vaults generate yield on single-stake assets, not LP pairs, by running risk-averse yield strategies such as options spreads. Options spreads, as a specific practice, involve writing and purchasing options via the Dopex options protocol, also built on the Arbitrum L2.
The underlying Dopex vaults, known as Single Staking Options Vaults (SSOV), generate yield from the premiums that are derived from selling European-style options. It is possible that an SSOV option buyer could lose a percentage of their underlying tokens if certain strike prices are met on a given option vault. However, for Jones DAO, we are opting for safer accumulation strategies that will use mechanisms such as SSOVs to minimize risk. We plan on opening auxiliary vaults in the future for users who are seeking more risk.
Jones vaults abstract away the complexity of understanding technical options theory, greeks, and continually managed yield strategies. Jones DAO users get access to this powerful tool when they deposit their assets and receive jAssets in return. We’ll explore this in the next section. For more technical information on options strategies and the Dopex platform specifically, be sure to check out the Dopex Academy resource.
What are jAssets?
jAssets are fully composable yield-bearing asset tokens that unlock liquidity and capital efficiency for assets in our vaults. When a deposit is made to the primary Jones vault for an asset, a jAsset token is minted to represent the deposit. Upon withdrawal, the jAsset token is burned and the deposit and yield is received back by the depositor.
Composability is a very powerful thing. Pending third-party adoption, users will be able to take their jAssets, which accrue organic yield, and deposit them into other protocols. This could include lending platforms, yield farms, or AMMs. For example: users could get leverage on their jAsset positions, and consequently their vault position, which is essentially the ability to get leverage on an options spread. This type of multi-layer leverage is unprecedented in DeFi.
We are currently working with a number of protocols to integrate jAssets across the DeFi landscape - more on this to come in future updates!
The Liquidity Problem
Before Jones DAO, users who wanted to earn from Dopex SSOVs had to lock their assets for a whole month. With jAssets, users are able to move in and out of vaults by simply buying or selling jAssets on SushiSwap (or other exchanges in the future).
*It is important to note that if a person does not withdraw their deposits and yield from a Jones Vault at the end of an epoch, the profits are automatically compounded.
What else can jAssets do?
jAssets unlock a massive amount of versatility for DeFi that ultimately drives maximum value to protocol users. In addition to the yield and composability described above, jAssets also allow the users to unlock yield from:
- JONES emissions
- LP fees with minimal risk of impermanent loss
- Lending yield when positions are used in a lending protocol
Moreover, users will also be able to lock their JONES as veJONES (voting escrow JONES), similar to the model pioneered by Curve Finance. Locking tokens into veJONES will grant users enhanced governance abilities in addition to sharing the revenues of the Jones DAO platform. The fees that Jones DAO charges on vaults are in-line with industry norms and can be found in our protocol fees documentation. More information on the veJONES model coming soon!
Users get a high-yield, single staked composable asset that provides them multiple streams of yield and the ability to own a portion of Jones DAO revenues.
The power of jAssets cannot be understated.
The future of Vaults and jAssets
Jones DAO is focused on bringing even more utility, composability, and yield streams to Vault/jAsset users. Different risk profiles and asset Vaults will be added over time as the protocol matures. We also expect a significant amount of partnerships and integrations to be announced in coming months, all of which will further enhance the capabilities of the platform overall.
Join the Jones DAO community to stay up to date on our upcoming releases and partnership announcements. We’ll be hosting AMAs, previews, and sharing plenty of alpha: