ve(3,3): A New Tokenomics Model Transforming DeFi
















ve(3,3): A New ...


ve(3,3): A New Tokenomics Model Transforming DeFi

2 mins read / updated on Fri Jul 21 2023



As the DeFi cosmos continues to expand, we often come across a new star, a novel innovation that changes the landscape. One such remarkable discovery is the ve(3,3) tokenomics model along with its companion, veToken. Pioneered by renowned DeFi navigators Andre Cronje and Daniele Sestagalli, this model aims to address the liquidity challenges that have long haunted DeFi and also enhance the DeFi ecosystem's sustainability.

The Problem: Liquidity Shortages in DeFi

The DeFi landscape, akin to 'Planet Liquidity,' often experiences liquidity shortages. Users frequently lock their assets to participate in transactions, leading to a lack of liquidity. The ve(3,3) model emerges as a solution to this issue, aiming to boost the flow of locked tokens in DeFi and foster a healthier financial ecosystem.

Understanding ve(3,3)

The ve(3,3) model is a unique amalgamation of two models: ve (vote escrow) from Curve and Convex, and (3,3) from Olympus DAO. It symbolizes a spaceship with two powerful engines, each aiming to propel the DeFi ecosystem to new heights.

The 've' engine empowers users to lock their assets for gaining voting rights and rewards, the quantity of which increases with the lock time. However, it faces a critical challenge – liquidity shortage.

The '3,3' engine, on the other hand, encourages users to stake as much as possible. Still, it also encounters a problem – the risk of token value decline as more tokens are generated. This model requires a delicate balance to ensure profitability for all stakeholders.

The Brilliance of ve(3,3)

With ve(3,3), Cronje and Sestagalli aim to resolve these problems, encouraging users to lock tokens while also benefiting from it. The result is a significant improvement in liquidity and sustainability in the DeFi space.

Ve(3,3) aligns token emission with positive behaviors, essentially creating a reward system. Users who lock up their assets earn transaction fees. This strategy attracts more users into locking their assets into the system, further enhancing liquidity.

Moreover, the model can adjust the token's emission rate based on market supply, striking a balance between supply and demand and improving the token's price-holding capacity.

The Star Companion: veToken

Accompanying ve(3,3) is veToken, a unique NFT that can serve as DeFi collateral and be traded on secondary markets. For instance, veTHE is a veToken for ThenaFi, one of the fastest-growing DEXs in the BNB ecosystem.

Benefits of ve(3,3) & veToken

The ve(3,3) model and veToken offer several benefits:

  • Deflation: They can significantly contribute to token deflation.

  • Easy transferability: veToken can be easily transferred and traded.
  • Direct distribution of transaction fees: Users receive transaction fees as rewards.
  • Creation of a secondary market for political power: The locked tokens equate to voting power, creating a new market dynamic.

Conclusion: ve(3,3) – A Trendsetter in DeFi

Ve(3,3) has the potential to revolutionize DeFi protocols and significantly enhance token deflation. It is an innovative trendsetter, and early adopters could potentially reap substantial rewards. As we continue to explore the vast DeFi cosmos, models like ve(3,3) will undoubtedly shape the future of this digital financial universe.


Utkarsh Verma

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