Tokenomics

Token emission, a widely embraced strategy for project development, involves distributing additional tokens into circulation. In the initial project phases, the collection of fees is minimal, necessitating the incentivization of Validators through the introduction of emission tokens, designed as rewards.

The incentive mechanism's goal is to advance to a stage where participation is solely driven by fees, eliminating reliance on block rewards. However, Automated Market Makers (AMMs) encounter challenges in incentivizing fee collection compared to liquidity, resulting in two major issues: a surplus of block rewards causing inflation and diminishing token value, and the overall unsustainability of the incentive mechanism, impeding the optimal development of the protocol.

Building upon this context,ve(3,3) mechanics integrate the Olympus DAO anti-dilution approach, also known as the rebase mechanism, with Curve's vote-escrowed model within the concept initiated by Solidly. This integration serves to safeguard veNEP holders from dilution while enabling a dynamic distribution of veNEP among participants over time.

Token Utilities

The ve(3,3) token provides holders with several key benefits:

• Voting Power: Holders can vote weekly on gauges, which determine emission distributions.

• Fee Sharing: Access a significant portion of trading fees and all associated pool bribes.

• Rewards for Locking Tokens: By locking protocol tokens, users become Voters who influence emissions, earn trading fee rewards, and gain additional incentives.

• Liquidity Incentives: Liquidity Providers receive their share of protocol token emissions.

• Governance Participation: Token holders can vote on protocol improvement proposals, shaping the future of the protocol.

This structure creates a robust utility model, encouraging active participation, rewarding contributions, and fostering the protocol’s growth and development.