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What is ve(3,3)
Understanding ve(3,3) DEX Dynamics
Ura mechanics reflect a combination of two DeFi concepts:
- 1.Vote-Escrow — Originally presented by Curve, anyone will be able to lock(escrow) the DEX's governance token (from URA -> veURA), allowing the holder to then participate in governance to earn rewards.
- 2.Staking/Rebasing/Bonding (3,3) Game Theory — Made popular by the Olympus DAO, the (3,3) token economic model favours incentivizing long term holders of the token.
Liquidity providers receive
$veURAvoters receive protocol fees, bribes and rebases.
- Every epoch, liquidity providers (LPs) receive
$URAtoken emissions proportionally to the votes the pools accumulate.
- Participants can lock their
$URAto be able to vote on the next epoch distribution of emissions, becoming veURA Voters.
- veURA Voters are rewarded (proportionally to locked amounts) for their votes with 100% of the protocol trading fees and any additional voters incentives (bribes) from the current epoch.
- Protocols (or any individual) can bribe
$veURAvoters to favor their token LPs, channeling more
$URAemissions to their pool, thereby attracting more liquidity providers and amplifying their liquidity.
Ura's Flywheel Effect
The ve(3,3) model ensures all participants in the Ura protocol benefit from aligned incentives.
- Liquidity Providers: Incentivized to contribute to pools with the highest
$URAemissions which can be locked for additional incentives.
- Voters: Incentivized to vote for pools offering the most bribes and those with high trading volumes, as these pools yield the highest fees.
- Traders: Benefit from reduced slippage and favorable prices due to deep liquidity.
- Protocols: Gain access to a shared liquidity platform and have the flexibility to incentivize voters directly, attracting more liquidity to their respective pools.
Last modified 14d ago