Unlike most cryptocurrencies, JAY exchanges do not rely on liquidity pools or market makers on a CEX/DEX. Instead, the liquidity that is required to exchange ETH/JAY or JAY/ETH is derived from the Jaypeggers vault and corresponding mint/burn mechanism.
While Jaypeggers is not reliant on liquidity, as stated above, a JAY/USDC liquidity pool will enable the creation of arbitrage opportunities beyond those found in the Arbitrage Marketplace.
For example, if ETH increases in USD value, then it will be cheaper to purchase JAY from the USDC pool than from the contract. Since new tokens are not minted when purchasing from the liquidity pool, the user also avoids the fees that are applied when purchasing JAY with ETH on the Jaypeggers app. Conversley, if ETH decreases in USD value, then it may be cheaper to eat the fees and purchase JAY with ETH from the contract on the Jaypeggers app.
The fee structures shown below in #buying-jayand#selling-jaydetail an incentive model for users to provide liquidity to JAY/USDC and stake their corresponding LP tokens.
Disclaimer: Due to the variety of tax law across jurisdictions, the contents of this website are intended to convey general information only and not to provide legal advice or tax advice or opinions. The contents of this website, and the posting and viewing of the information on this website, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. The information presented on this website may not reflect the most current legal developments. No action should be taken in reliance on the information contained on this website and we disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. A tax attorney should be contacted for advice on specific legal issues.
Similar to the above purchasing method, JAY can also be sold for ETH directly through the Jaypeggers app. At the point of sale, users receive 90% of their JAY's value in ETH from the Jaypeggers vault. The remaining 10% is allocated at 2% to LP stakers, 1% to the Jaypeggers team, and 7% is retained in the vault. The underlying JAY tokens are burned causing a decrease to the total supply whilst the 7% vault retention increases the amount of ETH backing JAY. The process of reducing supply and simultaneously increasing ETH backing ensures that the value of JAY will increase even when it is being sold.
Disclaimer: Due to the variety of tax law across jurisdictions, the contents of this website are intended to convey general information only and not to provide legal advice or tax advice or opinions. The contents of this website, and the posting and viewing of the information on this website, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. The information presented on this website may not reflect the most current legal developments. No action should be taken in reliance on the information contained on this website and we disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. A tax attorney should be contacted for advice on specific legal issues.
In addition to acquiring JAY via NFT harvesting, JAY can also be purchased directly from the Jaypeggers app using ETH. When a user buys JAY with ETH on Jaypeggers, new tokens are minted through the Jaypeggers contract. JAY purchases have a 10% tax that is distributed to LP stakers, the Jaypeggers team and the vault. LP Stakers recieve 2% as added incentive to provide liquidity and stake LP tokens. The Jaypeggers team receives 1% as operating revenue. Finally, the vault receives 7% to ensure that the amount of ETH backing JAY increases at a greater rate than the total supply of JAY.
Disclaimer: Due to the variety of tax law across jurisdictions, the contents of this website are intended to convey general information only and not to provide legal advice or tax advice or opinions. The contents of this website, and the posting and viewing of the information on this website, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. The information presented on this website may not reflect the most current legal developments. No action should be taken in reliance on the information contained on this website and we disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. A tax attorney should be contacted for advice on specific legal issues.
An in-depth look at the asset flow and fee structure for buying and selling JAY
Disclaimer: Due to the variety of tax law across jurisdictions, the contents of this website are intended to convey general information only and not to provide legal advice or tax advice or opinions. The contents of this website, and the posting and viewing of the information on this website, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. The information presented on this website may not reflect the most current legal developments. No action should be taken in reliance on the information contained on this website and we disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. A tax attorney should be contacted for advice on specific legal issues.