V2 Tokenomics
Last updated
Last updated
Velocore V2 utilizes two tokens for managing its utility and governance:
$VC — ERC-20 utility and reward token of the protocol
$veVC — ERC-20 governance token of the protocol
$VC is used for rewarding liquidity providers through emissions.
$veVC is used for governance. Any $VC holder can vote-escrow their tokens and receive the same number of $veVC at any time. There is no lock-up period and every $veVC token has the same voting power.
Conversion from $VC to $veVC is always possible, but it's irreversible. $veVC can be liquidated at any time through the $VC/$veVC pair on Velocore.
Velocore mechanics were inspired a blend of two DeFi concepts:
Vote-Escrow — first introduced by Curve to bolster incentives for long-term token holders
Staking/Rebasing/Bonding or (3,3) game theory — designed by Olympus DAO
Velocore V2 is designed differently from the typical model known as ve(3,3), yet it inherits its spirit.
At the heart of Vote-Escrow is the virtuous cycle structure where high trading volume leads to high trading fees, high gauge votes, high rewards, and in turn high Total Value Locked (TVL). This ensures the utility of the token and prevents distortion in the incentive structure. It's further optimized through the removal of epochs and a real-time voting mechanism.
The spirit of game theory, represented by (3,3), has been re-interpreted to give stakers the freedom to easily find the optimal balance point and act accordingly. While the structure that benefits the entire protocol when everyone stakes their rewards is maintained, the problem of liquidity difficulties faced by existing stakers and the barrier to entry for new users has been resolved. Now that $veVC has transitioned from NFT to a fungible ERC-20, it can be converted to $VC at any time according to market value.
It's the same as V1
It's the same as V1