What is ve(3,3)

Understanding ve(3,3) DEX Dynamics

The ve(3,3) Economic Model

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.

How it Works

Liquidity providers receive $URA emissions, and $veURA voters receive protocol fees, bribes and rebases.

  • Every epoch, liquidity providers (LPs) receive $URA token emissions proportionally to the votes the pools accumulate.

  • Participants can lock their $URA to 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 $veURA voters to favor their token LPs, channeling more $URA emissions to their pool, thereby attracting more liquidity providers and amplifying their liquidity.

The Ura Flywheel

Participants Incentive Alignment

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 $URA emissions 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.

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