hJOE Governance Vote
The long-awaited hJOE vote is coming, let's prepare.
The long-awaited hJOE governance vote is coming soon, it’s time to prepare and begin considering your vote.
A SteakHut governance proposal will go live on Snapshot, allowing the community to decide on the future of hJOE. Several options will be proposed to enable the community to decide on the best path forward.
The History of hJOE
To best understand an appropriate path forward for hJOE, we must first understand the history and context behind the hJOE derivative token.
In January 2022, Trader Joe announced the veJOE program in their tokenomics overhaul. veJOE introduced the ability to lock $JOE to earn boosted farming rewards. With the creation of veJOE SteakHut emerged as a veJOE aggregator designed to help users get the most out of their Trader Joe V1 farming.
As a “Joe Wars” protocol SteakHut entered into friendly competition with Vector and Yield Yak, to lock as much JOE as possible and earn users the best possible rewards.
SteakHut incentivized a large amount of $STEAK rewards to JOE Zappers for locking $JOE tokens. Users could zap or “blackhole” their JOE to hJOE and earn STEAK rewards for doing so. hJOE holders have had the opportunity to amass a large allocation of STEAK tokens in rewards.
In Q4 2022, Trader Joe released their DEX V2, The Liquidity Book. This introduced concentrated liquidity. With the introduced DEX model the utility for VeJOE was reduced and the future utility was uncertain.
Trader Joe’s core team later decided to sunset veJOE. SteakHut transitioned hJOE to an sJOE derivative token to continue accruing yield for stakers.
SteakHut has diversified completely, offering an innovative Active Liquidity Management platform, and no longer accrues any fee from the hJOE products.
hJOE Liquidity
Ahead of the governance vote, liquidity supplied by the SteakHut protocol has been removed for the hJOE/JOE pair, to prevent the gamification of voting and potential arbitrage of vote outcomes.
Why create a governance proposal?
hJOE was originally established as a veJOE derivative token. With the need to pivot the hJOE product, there clear divide between paths that users feel are most appropriate for hJOE, a governance vote allows the community to reach a consensus on the future.
In the spirit of DeFi, users will have the final say on the future of the token.
Who can vote on the governance proposal?
$STEAK is SteakHut’s governance token and holds governance power over all SteakHut proposals. The predominant emissions of STEAK have also been to hJOE holders, aligning the incentives of both tokens.
Both STEAK and xSTEAK holders will be able to participate in the governance vote.
hJOE Context and Considerations
Approximately 1.5m hJOE is in circulation
Users Zapped/blackholed JOE to hJOE for the veJOE product
An estimated 1,000,000 $STEAK (20%) was spent directly on emissions and marketing to incentivize the Zapping of hJOE.
$STEAK is the protocol’s governance token
Voting Options and Community Consensus
There are largely two opinions present amongst the community in the handling of hJOE. We have also seen the other JOE wars protocols opt towards strategies in line with these two opinions:
Option One: sJOE LSD Product
This is the approach that SteakHut has taken for the previous 5 months. sJOE is the reward staking model for Trader Joe that receives protocol fees from the DEX. With the sunsetting of veJOE, hJOE will be converted into an sJOE wrapper.
SteakHut will optimize rewards from sJOE and rewarding it back to hJOE stakers.
The downside of this approach is the decreased liquidity currently available to facilitate trading between hJOE and JOE. If selected, this method will be trialled further.
Option Two: Full Redemption at 100%
In this option, underlying JOE would be returned to hJOE holders offering a conversion rate of 1:1.
hJOE holders will be able to convert tokens once the contracts are created allowing for redemption of hJOE for JOE at a 1:1 ratio.
The downside of this approach is 1,000,000 STEAK was used to incentivize veJOE accrual, which utility was cut for shortly after by the DEX. This can be seen as an opportunity cost for STEAK-Holders, whereas the emissions could have been used for various other purposes to create value for the protocol.
Option 3: Partial Redemption at 90%
This option serves as a compromise between the interests of hJOE and STEAK. hJOE holders will be able to redeem underlying JOE at a rate of 1:0.9, the remaining 10% will be distributed to $STEAK stakers.
Timeframes
Voting will be live on Snapshot in the coming days. Once live the community will have two weeks to vote for their preferred option. After voting is completed the SteakHut team may have to develop infrastructure to facilitate the execution of the outcome, further updates will be provided once completed.
From the SteakHut Discord users can appropriately discuss the governance vote, there is a dedicated channel for hJOE discussions to facilitate this.