Thread by @0xKira_

1/ @JungleDefi: Choices, choices, choices🌳

Investors want choices.

Are you a yield farming enjoyoor but don't want to lock up your capital in a farm?

Or do you want your yield upfront, and to just hold spot?

Jungle Finance is bringing all these choices to #Solana 👀

$JFI

2/ Jungle Finance brings unique derivative assets to Solana, which allows for deposited assets to be split into:

- Principal Tokens (jTokens)
- Yield Tokens (iTokens)

Okay... but what does that even mean?

3/ Principal Tokens (jTokens), represent the base asset deposited, without the right to yield rewards.

Using $SOL as an example:

$jSOL will give you the right to the base asset, $SOL, deposited in the vault.

But why wouldn’t you want the yield? Isn't that the point of farming?

4/ Ah, but that's not all, you also have your Yield Tokens (iTokens).

$iSOL will give you the right to the yield generated on the vault over the time period that you have selected to deposit.

Say, I choose to deposit for 1 month, my iToken will be something like $iSOL-MAY2022.

5/ This token holds the rights to the rewards to be earned over the 1 month period. The yield accrues over time and on the open market, the price of the token should (ideally) reflect so.

As such, holding both these tokens will give you access to your principal AND the yield.

6/ But here's the fun part.

Because the tokens are split, investors who want to access their yield rewards upfront, can sell off their iTokens, in order to unlock the future productive capacity of their capital.

This can be swapped for more jTokens to increase spot exposure.

7/ On top of that, jTokens can also be deposited into their respective jToken/Token pools (e.g. $jSOL / $SOL ) to generate more yield.

Jungle has partnered with @Saber_HQ for their pools. And since Saber allows for single side LP deposits, this makes things sooo much easier.

8/ On the other hand, farmers can buy iTokens, to earn yield without as much capital locked up. This makes their investment much more capital efficient.

Beyond just buying and selling yield, iTokens can also be used for speculation on the future yield increasing/decreasing.

9/ Since jTokens and iTokens can be minted and redeemed at any time through the vault's duration, this allows arbitrageurs to step in to keep the price of jTokens and iTokens in line.

(iTokens will of course also account for rewards that have already accrued, if any)

10/ As a proof-of-concept, Jungle will launch with only $RAY and $JFI (Jungle's governance token).

However, as they grow, $SOL, $ETH and $LUNA will be supported as well!

Moreover, Jungle is expected to further develop to include many new snazzy features...

11/ This will include:

- Lending pools which use jTokens as collateral and issuing L-Tokens to represent interest on borrowed tokens (expect L-token markets too!)

- Margined trading on jTokens, iTokens AND LTokens

12/ Tokenomics

Now, we all know the meme about Solana defi coins and their terrible tokenomics, especially when it comes to VC allocations.

Fortunately, Jungle seems to be doing pretty alright on that front as well.

13/ $JFI's allocation is pretty neat (for a $SOL defi coin kek)

- Seed investors: 10% (at $0.10)
- Team: 10%
- Treasury: 5%
- Airdrop: 10%
- Farming Rewards: 65%

That’s 75% to the community! Not bad if I’d say so myself :-)

14/ Not just that, Farming Rewards are projected to be emitted over the course of 10 years. Yes, 10 years!

Team and Seed Investors will have their tokens vest over 50 months, starting 6 months after the initial token mint (i.e., vesting will begin on Aug 2022).

15/ And of course, not to mention, Jungle’s founder is the one and only gigabrain, @IDrawCharts.

Pretty random, but here is one of my favourite tweets from him about funding rates:

https://twitter.com/idrawcharts/status/1474527476244271106?s=21

16/ Beyond Jungle, I do see this as part of a wider trend to increase flexibility and use cases for our assets including:

- Granularisation: This is what Jungle is doing. @Prism_Protocol on #Terra is doing something similar as well with $cLUNA, $pLUNA and $yLUNA.

17/
- Fractionalisation: Mainly in NFTs with protocols like @NFTX_ and @solventprotocol creating liquidity to borrow/lend and farm fractionalised NFTs.

- Composability: Many protocols have done this in various ways e.g. Atlantic Options on @dopex_io, cTokens on @solendprotocol.

18/ This ability to churn out more and more flexibility and choices for end users is what makes Defi (and protocols like Jungle Finance) so exciting and will continue to push the boundaries of what is possible only in crypto.

Super stoked.