veToken Finance

Lock more veAsset permanently while providing boosted rewards for regular users

Motivations:

veCRV token economics have been approved and increasingly adopted by various DeFi products, of which a majority use an inflationary tokenomics model to incentivize user participation. These are not sustainable in the long term perspective. There are an increasing number of defi projects that have started to adopt the ve-model.

Opportunities

First

With an increasing number of DeFi products that have started gaining implementation and adoption throughout the market, there is a need for 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.

If you are a yield aggregator protocol like PICKLE, who has been adopting the ve-model for a year now, by integrated with veToken finance, the opportunity exists to increase the usability of yielding pools (in this case, referred to as pjar), while permanently locking PICKLE (also known as Dill), which will lead to a yield increase and repetitive positive cycle.

If you are a lending protocol like Hundred Finance, another protocol who recently adopted the ve-model, by integrating veToken, the opportunity exists to increase the supply and borrow rates, as well as increase fees, leading to more HND locked, more supply and borrow activity, and thus the cycle repeats.

Second:

Focus on long term sustainable solution: Learning from CVX and Andre’s Solidly exchange, in a long run viewpoint, in order to make such a protocol working with all ve-model projects in the long run, simply using governance token emission is not a long term and scalable solution that supports ve-model projects as generic protocols.

Third:

veAsset — Asset liquidity pools (LPs) are critical to enable such protocols continuously hounding regular users to lock the veAsset permanently; LP pools should be protocol-owned liquidity to reduce the impact of mercenary liquidity providers carrying out short-term farming practices. This will help maintain the ratio between veAsset — Asset near (1:1), and at the same time will be used as a source of protocol revenue.

Competition:

We did not want to launch a Convex, votium or Bribe to compete with existing projects. As adopting ve-model becomes a trend for existing and new defi protocols, this was designed with the generic protocol which adopts the ve-model in mind.

Solutions:

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 via bond and protocol owned LP (veAsset-Asset LP), 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.

Here is the CVX model:

Support CRV, cvxCRV for profit yielding, vlCVX for governance on Curve.

This is the VE3D model:

Designed to support all ve-model projects, vetAsset for profit yielding, locked ve3d(3,3) — ($xVE3D) — for governance across all integrated ve-model projects, and VE3D emission that is based on the owned LP (including the value of veAsset the contract has locked). It is a long-term sustainable solution for ve projects by not utilizing governance token emissions, and instead engage through protocol-generated fees and protocol-owed Lqiudity.

Protocols that stake ve3d(3,3) receive a full liquidity boost package due to veToken support from AMM to lending and yield-generating protocols. Using one type of token xve3d can boost all the gauges that support the ve-model.

The new design works to stay with a few principles:

  • All veToken protocol revenue (income - expenses) will all be located to ve3d stakers — xve3d

  • VE3D emissions by the protocol should backed with veAsset locked value and LP of veAssets — Assets

  • xVE3D (Staked version of VE3D) vote for weight gauges and decide which pools receive VE3D token emissions (besides the protocol fees generated from all LP revenue).

Other Key Points:

  • All xVE3D holder owns the LP token of veAsset-assets and their future profits

  • xVE3D holder owns all the permanent veASSET that are permanently locked by veToken Finance

  • xVE3D holders owns the governance rights to the veAsset that the protocol has locked

  • xVE3D holders own performance fees for the LP token on our yield products

VE3D model

  • Yield aggregator for ve-model projects

  • Protocol owned critical LP (veAsset — Asset LPs)

  • ve3d(3,3) stakers receive all protocol revenues

  • ve3d(3,3) natively supports delegation

  • Native support for adding third party tokens and incentives

  • Permissionless support for new veAsset integration

  • Permissionless support for Gauges & Bribes

Credits:

Reference

1. Convex(Curve) = Curve + 🚀

2. CRV wars: understanding the race to accumulate power to influence Curve Finance protocol

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