Jarvis Network (JRT), a Set of Protocols to Link Decentralized Finance (DeFi) and Traditional Finance

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Jarvis Network (JRT), a Set of Protocols to Link Decentralized Finance (DeFi) and Traditional Finance
Jarvis Network (JRT), a Set of Protocols to Link Decentralized Finance (DeFi) and Traditional Finance

Jarvis Network (JRT), a suite of protocols on Ethereum and Polygon intended to facilitate the adoption of decentralized finance (DeFi). Its first protocol, Synthereum, has the role of bridging traditional and decentralized finance through the issuance and exchange of synthetic currencies on the blockchain, such as jEUR or jCHF, for example. Called jFIAT, these new stablecoins can be bought and sold through your bank account, trade without slippage and generate returns.

Jarvis Network, Creating a Bridge Between the Two Finances

Launched in 2019, Jarvis Network is a set of protocols based on Ethereum and Polygon blockchains to develop infrastructure and applications dedicated to decentralized finance (DeFi).

The main objective of Jarvis Network is to facilitate the adoption of DeFi so that everyone can access finance without intermediaries and without conflicts of interest, open and transparent.

Synthereum, its first protocol, is the cornerstone of the project and will serve as the basis for all other protocols.  Indeed, Synthereum creates a bridge between traditional finance and DeFi with jFIATs, currencies like the euro, the Swiss franc and the Philippine peso recreated on the blockchain in the form of synthetic assets on-chain assets that follow the price movement of any other asset. Thus, the jEUR follows the course of the euro. The objective is to build an ecosystem of protocols and applications around these jFIATs, hence the importance of this first protocol for Jarvis.

Synthereum, therefore, allows the issuance and exchange of jFIATs. This allows users to gain exposure to the price movement of any currency, trade them with each other or other crypto-assets, and even generate returns. This is an ideal solution for crypto traders who would like to take their profits and keep them in stablecoins in a currency other than the US dollar; or even for a saver who bears the full brunt of negative interest on his deposits in euros or Swiss francs, for example.

Unlike other stablecoins, jFIAT maintains its peg and is highly liquid, allowing it to be traded for just about any token where Synthereum is deployed (currently Polygon and Ethereum).

Part of the aspects of the Jarvis Network ecosystem is governed by its governance, which tends to eventually become a decentralized autonomous organization (DAO). To participate, you will need to stake Jarvis Reward Tokens (JRT), the native token of Jarvis Network. By staking JRTs, users of Jarvis Network protocols can actively participate in future developments of the latter, manage their cash flow, pay less fees or receive more rewards.

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Jarvis Network (JRT) logo

The Jarvis Network Ecosystem

The Synthereum Protocol

The protocol behind the Jarvis Network, Synthereum, allows synthetic assets to be created, bought and sold without slippage.

Synthetic assets are a way to bring traditional finance closer to decentralized finance. Indeed, they allow anyone to convert their local currency into its synthetic version on the blockchain. 

The roles of Synthereum can be summarized with the following points:

  • Issue jFIAT such as jEUR, jCHF or jGBP: a 0-rate borrowing system;
  • Exchange them without slippage: the creation of an on-chain Forex;
  • Generate returns in stablecoins: a sort of on-chain savings account.

The Issuance of Synthetic Assets

There are two ways to issue a jFIAT: via borrowing from oneself or via buying from a liquidity pool. 

In both cases, the process requires depositing collateral. Currently, only USDC is supported, but protocol governance can vote to add other collateral.

For USDC collateral, jFIATs are 125% over-collateralized and have a 105% liquidation threshold. This means it takes 125 USDC of collateral to issue 100 dollars of jFIAT. If the value of jFIAT increases to $119, the issuer risks liquidation.

At the time of writing, only 3 jFIAT are available: jEUR (for the euro), jGBP (for the British pound) and jCHF (for the Swiss franc). In the future, Synthereum will offer its users the possibility to create more: jPLN, jPHP, jXAF, jCAD, etc. Each currency has its specificity and will therefore have a different level of over-collateralisation. Here again, it will be up to the governance to vote on the deployment of new jFIATs and their various parameters.

In the case of borrowing from oneself, the user issues the jFIAT himself: he deposits 125 USDC of collateral and borrows 100 dollars of jFIAT at the rate of 0. If he wants to recover his collateral, he must reimburse his debt and burn the jFIATs it issued.

Self-borrowing is a feature that has yet to be rolled out. Only buying from a liquidity provider is deployed on Ethereum and Polygon.

In the case of buying from a liquidity pool, it is the latter that will issue them: it deposits 125 USDC of collateral and borrows 100 dollars from jFIAT at a rate of 0, then sells them to the user. This is how trading on Synthereum works.

Exchange features

The Synthereum protocol allows jFIAT to be traded without slippage, creating an on-chain Forex market. As seen above, the exchange works through a liquidity pool that issues jFIAT when a user wants to buy jFIAT.

How does it work? If a user wishes to obtain jEUR with USDC or other jFIAT, the pool will borrow them (and therefore issue them) using its liquidity as collateral. Then, it will sell the jEUR to the user according to the prices given by Chainlink’s oracles. Since the pool is the issuer, it can be liquidated.

Small particularity, the issue and the sale of synthetic assets take place within the same transaction. So instead of the pool using 125 USDC to issue 100 jEUR and then selling them for 100 USDC, it will use the buyer’s 100 USDC and add 25 USDC from its pocket to issue them.

This is similar to clearing, a process used in particular by banks: at the end of the day, the bank takes stock of all incoming and outgoing transactions. Instead of executing all trades, clearing occurs on one side, and only one trade takes place. In the case of Synthereum, the compensation occurs in the same block. This way, instead of spending 125 USDC and then cashing out 100 USDC, the pool only spends 25.

For the sale of jEUR for USDC, the pool will buy back the jEUR from the seller with its liquidity according to the price given by Chainlink’s oracles, then will burn them to recover the collateral in USDC behind. In reality, since here, too, everything happens in a single transaction, the pool will first burn the synthetic assets to recover the collateral and will use the latter to buy them back from the seller.

What are The Advantages of This Method? 

This design is particularly useful for liquidity providers that feed the pool USDC. Instead of using a classic AMM which is capital-intensive to reduce slippage and requires liquidity providers to deposit two assets, Synthereum’s liquidity pools only need one token, the collateral, in a small amount.

“For example, 250,000 USDC of liquidity buys up to 1,000,000 jEUR, without any slippage. On a classic AMM, it would take tens or even hundreds of millions of dollars of liquidity to achieve the same result.”

This makes it easier for liquidity providers to control their risk, and they enjoy a higher return. The end-user enjoys trading without any slippage.

This method of issuing and destroying synthetic assets plays the role of an exchange and creates a Forex market entirely on the blockchain.

It is this key and innovative feature that allows jFIAT to maintain its peg and to be able to be exchanged for most tokens.

Fixing the Stablecoin Problem

Whether synthetic or tokenized, stablecoins face a major problem that hinders their adoption, especially in DeFi: their lack of liquidity. Outside of DAI, USDC, and USDT, few stablecoins backed by the US dollar are liquid, and it’s even worse for stablecoins backed by other currencies.

Synthetic stablecoins also struggle to keep their peg; this is also the case for some tokenized stablecoins, such as EURs which for many weeks was trading on Uniswap against USDC at a price 3% above the EUR/USD rate.

Regarding the peg issue, jFIATs are over-collateralized with USDC. Given the low volatility on exchange rates, it is very rare to see liquidations and highly unlikely to see jFIATs undercapitalized (i.e. when the collateral is worth less than the synthetic it guarantees).

Finally, as we saw above, jFIATs are traded without slippage against USDC at the market rate given by Chainlink’s oracles. This ensures that jFIATs can always be exchanged for their dollar value. It is, in particular, this specificity that seduces the fiat on and off-ramp.

Regarding the problem of lack of liquidity, launching a new stablecoin is always a challenge because you have to deploy a lot of resources to make it liquid and, therefore, useful. A liquid stablecoin makes it easy to exchange it for any other token. It’s a chicken and egg problem: for a stablecoin to succeed and be used, it has to be liquid, but for it to be liquid, you have to convince the liquidity providers that it will be used and will generate trading commissions for example. This is one of the problems that explains why we still have very few stablecoins today, increasing the friction to enter DeFi and the world of cryptocurrencies in general.

Synthereum solves the liquidity concern: all jFIATs, from the moment they are deployed, are liquid and can be exchanged for most tokens.

Synthereum being highly composable, it is then possible to combine two operations into one: first, an on-chain Forex exchange without slippage between jFIAT and USDC, then an exchange on an AMM using this USDC as “liquidity router.”

These two operations combined in a single transaction allow jFIAT to be exchanged against any other asset with the same slippage as against the USDC without the need to create new pools of liquidity on the MAs. This makes Jarvis’ synthetic assets scalable and liquid upon deployment since they use native USDC liquidity. This goes by the name “On-Chain Liquidity Router” or OCLR.

Thus, a user can access all the liquidity in the market through their jFIATs. To illustrate this innovative feature, suppose the Jarvis Network community votes to integrate a synthetic Polish zloty (PLN) asset. Users could then trade jPLN for AAVE tokens with the same price impact as if they traded USDC for AAVE. This would make it possible to have the best prices for the AAVE/PLN market.

Concretely, the OCLR could help Jarvis Network to capture niche markets like Poland more easily since the various problems inherent in the lack of liquidity of currencies and stablecoins outside the US dollar would be non-existent.

The OCLR is integrated into the first application of Jarvis Network, the Jarvis Exchange, which we discuss a little further down.

Yield Generation

In the near future, Synthereum will implement features allowing holders of Jarvis stablecoins to generate passive returns on their assets. 

Jarvis Network plans, in particular, to create pools of Forex liquidity composed of a jFIAT and USDC, and pools with a single type of assets, such as a EUR pool on Curve or Balancer, for example.

The returns will come from the trading commissions collected by these pools and the various yield farming programs. 

Since jFIATs can be exchanged without slippage against USDC or for any other token, as seen above, and they are integrated with fiat on and off-ramp, creating pools with a single type of asset on Curve makes it possible to give these particularities to all the assets in the pool.

For example, a jCAD-CADC pool (stablecoin pegged to the Canadian dollar) would allow the CADC to access the liquidity of the crypto-asset market by passing through the jCAD: a CADC holder who is currently an illiquid stablecoin could trade its CADC for jCAD via this pool, then the jCAD for JRT for example. This pool would also allow the jCAD to have a fiat on and off-ramp in Canadian dollars. In fact, the jCAD-CADC pool would see a so-called “utilitarian” trading activity and would generate native returns.

This type of pool has other advantages. In particular, it allows arbitrage between jFIAT and other stablecoins, which again would generate trading commissions.

By adding incentive programs on top of these natural returns, the team estimates that this would generate 5 to 20% per year on several stablecoins.

Jarvis DEX

With an interface similar to that of Uniswap, Jarvis DEX is a platform where it is possible to swap any crypto-asset such as ETH or USDC, against jFIAT, via the use of the OCLR described above.

Fully decentralized, this platform is relatively easy to use and connects directly to a wallet you hold. Jarvis Exchange supports MetaMask, WalletConnect, Portis, Coinbase Wallet, Ledger wallets, and Opera’s in-browser wallet.

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Screenshot of Jarvis DEX

What are the Roles of the JRT Token?

JRT staking

The JRT requires to be staked to unlock several features. Once staked, JRTs become stJRTs and can be used to participate in governance, reduce trading fees, or increase rewards from incentive programs.

As of this writing, Jarvis Network governance is discussing the implementation of staking rewards.

Staking or Vesting?

The stJRT can be used as collateral to borrow jFIATs. Rather, it is intended for active members of the community. More passive members can block their stJRT for a certain period of time, similar to Curve’s veCRV, to increase the functionality of the stJRT tenfold: more voting power, more reduction in trading fees and more rewards.

Jarvis Network Partners

Jarvis Network wants to develop a partnership system and an onboarding and sponsor program to motivate wallets and other apps to integrate its stablecoins and technology.

The Synthereum protocol could be used by any crypto-portfolio to recreate a DeFi Revolut: a fiat access ramp to buy and sell jFIAT via your account or bank card, liquidity to be able to exchange easily, performance to be able to offer “savings accounts” and integrations in other protocols to allow access to several financial services.

The first Jarvis Network partner to take the plunge is Mt Pelerin, a Swiss Fintech specializing in products and services bridging traditional finance and the world of cryptocurrencies.

This startup uses the synthetic asset issuance and trading infrastructure developed by Jarvis Network to offer its customers the ability to buy or sell synthetic stablecoins with fiat currencies through their over-the-counter market ( OTC).

This strategic partnership is also materialized by the possibility of obtaining jFIAT from the Bridge Wallet, a mobile, multi-channel and non-custodial wallet developed by Mt Pelerin. With the latter, users can buy jEUR, jGBP and jCHF by bank transfer (and soon by card), then receive them directly on an Ethereum or Polygon address. 

Connected to the Jarvis Network, Mt Pelerin is slowly approaching the features offered by a DeFi Revolut. This is a new dimension for users of the DeFi ecosystem. As a financial intermediary, Mt Pelerin helps Jarvis Network to create a solid bridge between the two finances:

  • Possibility of entering and exiting DeFi at no cost;
  • Ability to trade jFIAT against fiat currencies;
  • Ability to exchange jFIAT for other assets (feature under development);
  • Ability to access dApps, and, therefore, many other services via WalletConnect.

At the time of writing these lines, Jarvis Network is preparing new integrations, in particular, to improve the trading part. The project should, in the near future, enter into new collaborations with heavyweights in the DeFi ecosystem.

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Integrating Jarvis Network with Bridge Wallet

The Jarvis Network Team

According to the Jarvis Network website, 11 people are working on the development of the project. The founder of Jarvis Network, Pascal Tallarida, began work on the project at the end of 2017.

An eclectic team quickly joined him, made up of many talents spread across the world. It includes in particular:

  • CTO Petar Kirov, a former engineer at VMware, an IT company acquired by Dell in 2016;
  • project manager Iliyan Iliev;
  • Solidity and full-stack developers.
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The main members of the Jarvis Network team

How to Buy JRT?

Regarding the purchase of JRT tokens, a JRT/USDT pair is available on the centralized platforms CoinEx, AscendEX and Hoo.com. Normally, the volumes there are sufficient so that you do not experience a slippage effect during the execution of your order.

At the same time, the JRT has many liquidity pools on decentralized platforms, namely Uniswap, SushiSwap, Balancer and Bancor Network. Since the JRT is a governance token of a DeFi project, it is best to acquire it on one of these platforms so that your tokens are directly stored on your MetaMask wallet.

To optimize your operations related to Ethereum-based decentralized platforms, we suggest using ParaSwap, a DEX aggregator that will allow you to find the best possible path for your transaction.

Explanations for Buying JRT via ParaSwap

  • Go to ParaSwap.io;
  • Click on “Connect Wallet” to connect your MetaMask wallet;
  • In the “Pay” tab, choose what you want to exchange JRT for;
  • In the “Receive” tab, add the JRT token with this address 0x8a9c67fee641579deba04928c4bc45f66e26343a;
  • Click on the “Swap” button to verify and confirm your transaction;
  • Finally, click on “Confirm Order” to execute the transaction;
  • Congratulations, you are now in possession of JRT tokens.

Ratings and Reviews on Jarvis Network

With the ambition of creating powerful tools to link traditional finance and decentralized finance, the Jarvis Network ecosystem has many assets to attract new users to DeFi. The Synthereum protocol is relatively innovative and makes it possible to no longer worry about the lack of liquidity of certain pairs, in addition to removing slippage.

The creation of jFIAT and other synthetic assets allows Jarvis Network to bring the entire finance world together on the blockchain. It opens the door to new possibilities for institutional investors but also for individuals.

Powered by the JRT token, this infrastructure is governed by the decisions of the holders via governance votes and will evolve according to the needs of the latter. To ensure the development of its project, the Jarvis Network team is currently working to conclude new partnerships in the same way as that with Mt Pelerin.

The biggest challenge for this range of protocols will be to find a place in the very competitive market of synthetic assets. With Synthereum, however, Jarvis Network has the necessary technical capabilities to make a name for itself in the world of DeFi.