Jones DAO

Derivatives

JonesDAO is an options strategies protocol that helps users actively manage complex option strategies like spreads to maximize yield.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Jones DAO offers users one-click access to DeFi options strategies without the hassle of actively managing these positions themselves.
What we like less
The team is anonymous and has substantial control over the vault contracts with no timelock in place. The team multisig also only requires 3/5 signers.
What it means for you
Jones vaults can be a great place for you to easily generate yield through options strategies while retaining liquidity of the deposited asset.

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Information
Exploit/Hacks
None
Info
  • Website
  • Token: JONES
  • Tags: Derivatives
Key Metrics
  • TVL: $12.4M (Rank #136)
  • TVL Ranking by Derivatives: #0
  • Blockchain: Arbitrum, Ethereum
  • Chain TVL
    • Arbitrum: $9.92M
    • Ethereum: $2.48M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code not reviewed by any experienced auditors
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2022; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Bottom 80% by total value locked increases risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • At least one critical governance issue documented
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to yield optimizers which deploy custom strategies to automatically manage user funds
  • Jones DAO writes and sells options contracts in Dopex to help investors gain yield without worrying about strike prices
Things to know about Jones DAO

How Jones DAO works

Jones DAO offers multiple vaults depending on the underlying asset and risk profile. The aim of Jones Vaults is to generate yield through complex and appropriately hedged options strategies. The PnL of the vaults is denominated in the underlying asset with the goal being to accumulate more of the asset over time. Each asset has a primary Jones Vault used to mint jAssets with auxiliary vaults for different risk appetites. Primary vaults seek to generate risk-averse and stable yields in all market conditions. The majority of funds are used to earn yield by writing covered calls with up to 5% of funds used to hedge this position through purchasing calls, puts or perpetuals. These vaults may also arbitrage inefficient option pricings across platforms to lock-in a small amount of risk-free yield. Auxiliary vaults are designed to cater to different risk profiles as they utilize more aggressive, directional option bets. Auxiliary vaults cannot be used to mint jAssets. At the start of each epoch, Jones opens deposits for a certain time window for users to deposit their assets and mint jAssets. Users can withdraw their assets plus any yield earned by burning their jAsset at the end of each epoch. jAssets are yield-bearing tokens that unlock liquidity for assets locked in options strategies.

How Jones DAO makes money

The platform generates revenue similar to a traditional asset manager by charging fees on the total value locked (TVL) and performance fees. Currently, the protocol collects a 2% annual fee on the total TVL (applied at each epoch) and a 20% performance fee on any yield generated.

How you make money on Jones DAO

You can generate yield by locking JONES tokens to receive veJONES, which is inspired by Curve tokenomics. veJONES holders can vote on gauge weights to direct more protocol emissions towards certain vaults and liquidity pools. Users who hold veJONES also earn a portion of protocol fees and inflationary protocol emissions.

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