The Jade Protocol, which employs smart contracts, provides a platform for reserve currencies that is anchored to at least one US dollar. A collection of digital assets held by the Jade Protocol Treasury serves as the foundation for the freely circulating Jade currency. The protocol can create and burn JADE, providing an elastic currency that ensures stability against changes in the market, while also allowing for growth against increased demand/interest in the Jade Protocol blockchain ecosystem.
What is Jade Protocol
On Binance Smart Chain, Jade Protocol is a decentralized reserve currency platform. “Unlike DAI or USDC, which are tied to the value of the US dollar, JADE’s reserves are made up of crypto assets held by the Jade Protocol Treasury, which is a more flexible approach than locking funds in USD’s strict regulatory framework.”
JADE is a freely floating currency backed by our BUSD Treasury stock. JADE tokens can only be minted or burned by the protocol, and only in response to price changes/volatility. Each JADE token is always at least 1:1 backed by a stable US dollar.
If the price of JADE falls below 1 BUSD, the protocol will buy and burn JADE to restore its trading value to 1 BUSD. The protocol does not impose an upper limit on the trading price of JADE.
JADE is backed by BUSD but not tied to it. Because of this, the JADE token’s value is guaranteed to be constant and never drop below its market price, which reflects the value of its underlying assets: 1 BNB plus Premium
The JADE protocol sells bonds, which are designed for a specific asset and are sold to investors in exchange for discounted JADE. Bonds help us offer our users amazing returns on investment by increasing the treasury (the amount of money available for investing).
How is JADE different from other reserve currencies?
The Jade Protocol by OlympusDAO is an improved fork with a fair launch. However, there are a few significant operational variations designed to offer the DAO community a beneficial investment approach.
Ethereum’s blockchain transactions can cost up to $200 per transaction. A typical Binance Smart Chain transaction costs about 50 cents, which will allow us to auto-compound at much higher rates and potentially increase the APY.
The Jade Protocol employs a unique fee recapture ratio. Instead of the 5% originally planned, 10% of the Treasury will be used for buybacks and burning.
The JADE Protocol Treasury will use 5% of its reserves to increase the marketing budget through Metcalfe’s Law, giving them an industry-leading presence.
How to invest in JADE Protocol
Users can play JADE in different ways, leading to varying outcomes.
Staking Jade
The primary value accrual strategy of the Jade Protocol is staking. You only need to hold.
Stakers can earn rebase rewards by vesting their JADE on the Jade Protocol website. Rebase rewards are derived from bond sales proceeds and can vary depending on the number of JADE staked
Staking is a long-term, passive strategy. Your cost basis is decreasing steadily and is now almost zero due to the increase in your JADE stake. If you stake for a sufficient amount of time, the increase in your staked JADE balance should eventually outpace the price drop if the market price of JADE falls below your initial purchase price.
JADE is locked by staking, and you receive an equal amount of sJADE. Your balance is automatically rebased each period. sJADE can be exchanged and combined with other DeFi protocols.
When you burn sJADE, you receive an equal amount of JADE as compensation.
Bonding Jade
Bonding is Jade Protocol’s secondary token-generation strategy. Bonding allows the company to raise liquidity and other reserve assets, such as BUSD, by selling JADE at a discount in exchange for those assets
The protocol quotes the bonder on terms such as the price and term of each reward, allowing them to claim portions at different stages. The full amount is claimed when all rewards have vested.
Bonding is a quick, active strategy. Bond discounts are only predictable to the extent that the secondary bond market’s price discovery mechanism reflects broad trends. In comparison with staking—which involves setting aside collateral and leaving it there until a threshold value is reached at which point you can redeem them for an agreed-upon amount of BTS—bonding should be monitored more actively because bonds can change value unexpectedly due to factors such as changes in supply/demand or new issuances on exchanges
By bonding, or protocol-controlled value (PCV), the Jade Protocol can produce its own liquidity. PCV is the amount of LP that our Treasury team holds in escrow on behalf of token holders and our ecosystem.
The liquidity for a potential exit strategy increases proportionately to the amount of PCV our treasury team is holding in escrow.