The veToken model is a tokenomics design where users lock their native tokens for a specified duration to receive non-transferable vote-escrowed tokens, or veTokens. These veTokens confer governance rights and often boosted yield opportunities within a protocol. The amount of veTokens received and their associated benefits are directly proportional to the amount of native tokens locked and the length of the lock-up period. This model aims to incentivize long-term holding and active participation in protocol decisions.
Context
News frequently analyzes the veToken model when discussing the sustainability and incentive alignment of decentralized finance protocols. Its adoption by various projects highlights a trend towards encouraging committed community engagement over transient participation. A key debate revolves around the potential for power concentration and the liquidity implications for the locked native tokens. Future developments include refinements to veToken mechanisms to enhance decentralization and user flexibility.
Yield Basis introduces an AMM model to generate Bitcoin yield on-chain, eliminating impermanent loss and expanding BTC's role in decentralized finance.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
