Motivations and Opportunity:
veCRV token economics have been approved and increasingly adopted by various DeFi products, of which a majority use an inflationary tokenomics model through liquidity mining to incentivize user participation. These are not sustainable in the long term if there is no demand to help offset the massively inflating supply.
As many projects have realized, this model can be beneficial in a number of different ways for protocols. The ve-model encourages and emphasizes long-term decision making given users typical long-term commitment to the protocol. Additionally, the ve-model has shown that aligned value and incentives are often present because participants are incentivized to hold their respective protocol token. Finally, supply and demand mechanisms are optimized within this model, prominently highlighted through vote-locked tokens relative to total supply.
The picture below is a collection of major projects that have implemented the ve-model, or are going to implement the ve-model (the list is not exhaustive).
As a result of the aforementioned benefits, there are an increasing number of DeFi products that have started gaining implementation and adoption throughout the market.
Due to the nature of the ve-model structure, which encourages long-term locking, retail investors and ve-model token holders may suffer a short term liquidity loss. Because of this, as well as the diverse nature of ve-model projects existent in DeFi currently, there is a need for a generic DeFi protocol that builds on top of ve-model projects (to work as CVX to CRV) to increase their liquidity and demand of their governance tokens, while increasing the usability of their own products.
veToken Finance: A long-term solution for ve-projects, utilizing protocol-owned LP
veToken Finance is an improved version of the CVX yield protocol that targets all ve-model projects through the locking of their veAsset permanently, while integrating an Olympus-like bonding system to keep the parity in the LP pools (veAsset-Asset LP), and while providing regular users boosted revenue and gauge weight bribes. By owning the critical LP veAsset-Asset trading pair, veToken will not need to provide long-term large emission rates of our own token to maintain the veAsset-Asset ratio, while still providing deep liquidity. In the meantime, voting power of the veAsset can delegate the voting power to broader DeFi projects through bribes.
veToken Finance Governance token: VE3D ( Delegated ve(3,3) )
The benefits of Staked ve3D holder:
- Receive profits generated from owned liquidity, and protocol fees from LP pools (curve, pickle, etc).
- A liquidity boost package for generic DeFi protocols to improve their liquidity at less cost by using a single token (xVE3D) to vote on all of the gauge weights from the ve-projects that are supported by veToken Finance.
- With more and more projects starting to adopt the ve-model, xVE3D will be used for permisionsless integrationg of future ve-model projects, and decide bond allocation distributions.
Benefits for regular DeFi liquidity providers:
veToken Finance allows liquidity providers to earn protocol fees from projects that adopt the ve-model and claim boosted APY without locking their governance token for 4 years by themselves. Liquidity providers can receive boosted APY and liquidity mining rewards without sacrificing their own liquidity effort.
veToken Finance was created in 2021 with the intent of maximizing rewards without sacrificing token accessibility. veToken looks to continue to adopt new voting escrow projects as they come to market, with an expected initial launch date this year. veToken enables and encourages governance, reward maximization, and liquidity — all in one place, encompassing a multitude of projects.
You can learn more about veToken Finance at our website below, and join the conversation with our Twitter and Discord communities below as well.
Stay tuned for more to come from the veToken Finance team.