$JST Token Review: Tron’s Foray into DeFi


10 min read
$JST Token Review: Tron’s Foray into DeFi
Disclaimer: *This isn't financial advice. Not saying that to avoid being sued - but saying that because it isn't. This is an opinion piece on why $JST is a pickup that was originally published for members of the Discord ; however, it is being released on the public blog (librehash.org), to spread good cheer and free information. Enjoy - take it for what it is. The author is not invested in this project, never has been or will be and is not invested in any other crypto projects either. Additionally, no one paid for this report and the author is not paid by any entity in the blockchain space (only individuals).

The purpose of this brief report will be to explain why the $JST token on Tron's blockchain presents itself as an interesting option for  investment in the short / long-term (or until we milk a decent bit of profit from this).

Introduction: What is the $JST Token?

The '$JST' Token is the "Just Token" (full name of the project).

Below is a quick view of the token (and associated 24H market metrics) from Coinmarketcap:

source: https://coinmarketcap.com/currencies/just/

What is it Actually?

Sticking on the same page (CMC), if we scroll down, the following brief description is provided for curious users:

Specifically, the screenshot above states:

"JUST Platform's Governance Token JST will be launched on 05/05/2020 during the Poloniex LaunchBase (Token Sale)."
"JUST aims to build a fair, decentralized financial system that provides stablecoin lending and governance mechanisms for users around the world. JUST is a two-token system. The first token, USDJ is a stablecoin pegged to the US Dollar at a 1:1 ratio and is generated by collateralizing TRX via JUST’s CDP portal. JST, the second token, can be used for paying interest, platform maintenance, participating in governance through voting, and other activities on the JUST platform."
"JUST allows all transactions, collateralization, and governance to be transparently executed on-chain. JUST is built on the TRON Network, the largest decentralized application ecosystem, and aims to provide a set of easy-to-use and transparent financial services for all its members."

Parsing Through All of the Fluff

What's written above is great, but let's cut through the fluffy promotional description of the project for a second and answer the question in a raw way

"What is '$JST' Really?"

**Tronchain's Leading Attempt / Foray into the DeFi Space

Its no secret that 'DeFi' (decentralized finance) has been going wild in the blockchain space.

It seems that damn near anything that launches with a basis in 'DeFi' is going nuts on the markets these days (Augur is up >20% over the past 24H at the time of writing, for instance).

Ethereum Dominates the DeFi Space - By Far

There is no viable competition when it comes to Ethereum and DeFi. Any relevant DeFi project (that doesn't have its own chain) is on Ethereum at this point in time.

Thus, it makes sense that $TRON (especially given the nature of Justin Sun), would want to throw its 'hat into the ring' by creating its own DeFi project.

$JST Token's Inception

This token launched into this space via IEO (Initial Exchange Offering).

Specifically, the 'IEO' was held on Poloniex's platform (Launchbase):

As one can see from the screenshot above, the IEO took place on May 5th, 2020.

link = https://archive.is/nxMoC

Total Raised From the IEO

The IEO raised a surprising $4 million (this is surprising considering Poloniex's near non-existant userbase at this point in time):

Worth Noting That Justin Sun Owns Poloniex

This information trickled out late last year (circa November / December 2019).

Here is a link to a CoinTelegraph report chronicling the revelation: https://cointelegraph.com/news/tron-founder-justin-sun-admits-investment-in-crypto-exchange-poloniex

For some reason, Justin Sun chose to lie publicly about his investment / involvement in Poloniex's exchange at first (until it was indisputably proven that he was the exchange's primary purchaser).

Super Brief Tiny Peak at $JST's Whitepaper

We performed the honors of downloading the whitepaper and hosting it on our own platform (just in case the whitepaper can' tbe found in the future for any reason).

Here is that link: https://media.librehash.com/TEVO2/boJeBiNu48.pdf

(screenshot of the whitepaper below):

USDJ Stablecoin System

Essentially, $JST is like the Tron version of 'MakerDAO', if you're familiar with how that protocol works.

But there's a reasonable chance that you're not familiar with how MakerDAO works - because that protocol is fairly confusing for those that are not familiar with derivatives, synthetic assets, collateral and other fairly high-level financial concepts and schemes (made more complex by marrying these concepts with equally complex facets of blockchain, such as smart contracts / smart contract code / etc.).

We're Going to Breakdown MakerDAO in a Brief, ELI5 Manner

Yes, we're looking at $JST - but this is going to be a breakdown of "MakerDAO" since they both work by the same principle.

*Reposting the Brief Description of '$JST' From Coinmarketcap:

Here is CMC's description of the project (again) for convenience (reposted because this portion contains the 'meat and bones' of what this really is):

"JUST aims to build a fair, decentralized financial system that provides stablecoin lending and governance mechanisms for users around the world. JUST is a two-token system. The first token, USDJ is a stablecoin pegged to the US Dollar at a 1:1 ratio and is generated by collateralizing TRX via JUST’s CDP portal. JST, the second token, can be used for paying interest, platform maintenance, participating in governance through voting, and other activities on the JUST platform."

MakerDAO ($JST) Made Simple

Yes, on its face - this stuff sounds unnecessarily dense and complex, but we're going to break all of that down in this section.

Fundamental Number One: Interacting With the Platform

Starting from the 'ground floor', a user interacting with $JST (or MakerDAO), will provide an asset that will be 'locked' by the protocol (MakerDAO / $JST).

For MakerDAO - let's say that asset is 'Ethereum'. Also, let's say you have 1 Ethereum that you wish to borrow against.

Fundamental Number Two: Providing 'Collateral' For Borrowing

If you wish to do so, you're going to start by giving that 1 $ETH to the protocol to be locked (for $JST Token, the collateral will be $TRX - of course).

The 'Locked Ethereum' Becomes Collateral

Collateral means the same in this context as it means in any other context.

Collateral Broken Down in Super Simple Terms:

Johnny asks to borrow his friend Bob if he can borrow his PS4 controller.

Bob is worried that Johnny will steal / lose / break his PS4 controller. So he feels anxious about lending it out to him.

Johnny says, "Okay Bob - since you're soooo worried that I'll lose/steal/break your PS4 controller, how about I give you my Xbox controller in the meantime? That way, if anything happens to your PS4 controller, you can just sell my XBOX controller and use the money from that to get you another pS4 controller."

In the scenario above, the 'XBOX controller' that Johnny gave Bob as 'insurance' to recoup Bob's losses in the instance that Johnny somehow loses / steals / breaks Bob's PS4 controller would be collateral.

Xbox controller is collateral in this situation.
Therefore, the PS4 Controller is being 'borrowed against' the Xbox controller

Make sense?

Collateral on MakerDAO / JST Works No Differently Than in the Example Above

The Ethereum that you provided as collateral will allow you to 'borrow against' it to receive 'USDJ' (in the case of the JST protocol) / (Dai for 'Maker').

USDJ is Minted Through This Collateralization / Borrowing Process

Specifically, when providing an asset ($TRX for $JST) as collateral, USDJ (a proposed stablecoin for Tron) is minted by virtue of that action.

Your Amount of Specific Collateral Becomes Known as a 'CDP'

CDP = Collateralized Debt Position (same term is used for MakerDAO as well).

Definition of 'Collateralized Debt Position' Not Much Different Than That of 'CDOs'

If you've watched any documentaries about the '2008 financial collapse' or the "cause of the 2008/2009 financial recession", then undoubtedly, you may have heard of the term, 'CDO' - also known as a 'collatearlized debt obligation'.

Per Investopedia, here is the definition of a CDO:

"A collateralized debt obligation (CDO) is a complex structured finance product that is backed by a pool of loans and other assets and sold to institutional investors. A CDO is a particular type of derivative because, as its name implies, its value is derived from another underlying asset. These assets become the collateral if the loan defaults."
[link: https://www.investopedia.com/terms/c/cdo.asp]

Similarly, the value of the USDJ (minted and distributed on how much of a collateralized asset it was borrowed against), is adjusted (via supply) to create a dollar peg.

CDP (Collateralized Debt Position) Process Outlined at the Beginning of the JST Whitepaper

Relevant excerpt provided below:

The whitepaper also provides an accompanying diagram as well:

Entire CDP Creation Process (USDJ Minting) As Outlined in the Whitepaper

The JST whitepaper provide a step-by-step guide on how USDJ is minted on this protocol in the whitepaper as well (reposted below for convenience):

The Above Screenshot Outlines $JST's Purpose

JST is needed in order to interact with this 'DeFi' protocol (at least if one wants to get back their collateral).

Specifically, it states:

"To redeem the collateral, the debt must be repaid with USDJ along with a stability fee paid with the platform token, JST. Finally, CDP holders can send a transaction to JUST to retrieve all collateral assets."

JST is Used to 'Stabilize' the Protocol

The fee itself is used as an adjustment in order to ensure the 'USDJ' peg here remains "sound".

Quitting Here With the Whitepaper Overview

THe purpose of this write-up is not to serve as a whitepaper review, but rather to give a better idea of this protocol and how it works.

Moving forward, however, we're going to look at some other relevant factors that has convinced us to pick up this token (especially given its relationship with the Tron protocol / ecosysteml, which we don't usually touch under any scenario).

$JST Token is Backed Heavily By Justin Sun

Yes, this is actually a good thing.

Below are some examples where Justin Sun has mentioned the token directly (in promotion / advertisement):

link = https://twitter.com/justinsuntron/status/1257682158329581569?s=20
link = https://twitter.com/justinsuntron/status/1285506130618146816?s=20 (this one occurred within the past 24 hours)
link = https://twitter.com/justinsuntron/status/1285107059109687296?s=20

Justin Sun's Entire Twitter Page is 75% Dedicated to This Project

It would be pointless to continue sharing all of the tweets by Justin Sun over the past few days / weeks that mention the JST protocol as there are **countless examples at this point.

What's Going On?

He's trying to pump the project. Obviously.

But bigger than that, it appears that there's a lot that's been invested in this project's success.

$JST is Tron's Foray into the DeFi Space

Tron is hedging all of its 'DeFi' hopes on $JST.

Contrary to Ethereum where there are no less than a dozen viable protocols at the time of writing that could be seen as 'competitors' to one another (in a 'market-share' sense), $JST is the only protocol on $TRX that leverages the protocol for this purpose.

Given the recent boom for 'DeFi' (almost exclusively on Ethereum, to date), its worth asking why $JST would be immune to receiving some of the same 'hype' / 'gains' that other prominent Ethereum projects have received to date.

Justin Sun May Be a Pump and Dump Shill and a Clown - But He's a Well-Connected One

You don't have to tell us about how much of a fool Justin Sun is.

Make no mistake about it, this report does not 'extol' the virtues / skills / prowess / wonder of Justin Sun.

But one thing that can't be denied, is that Justin Sun (and, by extension, $TRX) is well connected in the blockchain space.

Below is a piece of anecdotal evidence lying on Justin Sun's Twitter feed (posted in the last 24 hours):

Let's Not Forget Binance

Binance and Tron are best friends. Still.

And this is reflected in Binance's consistent public displays of affirmation (for $TRX and Justin Sun).

See below:

link = https://twitter.com/BinanceResearch/status/1285122832385679360?s=20

The above tweet essentially reads like 'market propaganda' / 'promotion' for $TRX - as a whole (and is another reason why we're semi-bullish on $TRX right now as well).

JST Token's Price Action is SUPER Non-Volatile; Which is Good

There isn't really enough substantive data for us to go to TradingView with this one yet, but coinmarketcap is more than sufficient for the time being.

Let's revisit that link, then take a look at $JST's price action:

Few Major Observations Here:

  1. No major pump at listing (AKA no typical x20 at list time, followed by an abrupt crash down to a consolidated x2 / x3).
  2. This project has been surprisingly non-volatile. No *major price swings here of > +/- 10%.
  3. At approx. $2 million of 24-hour traded volume, it has some healthy markets. Nothing outrageous / that indicates clear wash trading of some sort. The $2 million volume actually feels pretty organic, all things considered.
  4. At $12 million total MC, this project is nowhere near close to taking off from the station.

Conclusion

Putting everything together from the following facts:

  1. Consistent Justin Sun shills
  2. Connections that Justin Sun has (which means exchange listings, partnerships, and other open doors).
  3. Justin Sun's incessant posting about the project (seriously, go check his Twitter feed - he's been mentioning this project with increasing frequency - which leads me to believe that he has something staked on this project's success).
  4. There is no other competition on the $TRX protocol in terms of DeFi - so if anyone is going to participate in 'DeFi' activities on Tron, it has to be via $JST.
  5. We're in the midst of 'DeFi' fanatacism in the blockchain space currently.
  6. This project has NOT yet left the station and it has NOT yet pumped

Its hard to imagine a future where this project does not provide a healthy return from this point.

This isn't guaranteed, of course, but we'd be shocked if it didn't happen.

GO TOP