Everything you need to know about veDFX and the benefits it can provide

Background 📚

veDFX stands for ‘voting-escrowed’ DFX and is the governance token of the DFX Protocol.
It is a vesting and yield system based off of Curve and Angle's 'VE' token model. The key property of veDFX, beyond being a governance token, is that it is non-transferable, and it does not trade on liquid/open markets.

Features 🤯

veDFX can be obtained by locking up DFX from anywhere between 1 week, all the way up to 4 years. A smaller balance of veDFX is obtained when locking in a shorter time. veDFX balances decrease linearly with time to reflect the reduction in lock-time, approaching 0 veDFX when lock time is about to expire and locked DFX is to be released.
As stated above, veDFX is the token used for voting on governance proposals and routing DFX emissions through gauge weights in the DFX protocol.
This means that veDFX holders are directly shaping the future of the protocol. Votes for governance proposals & gauge weights will happen on-chain, and then executed by a multi-sig wallet.

Benefits for the Protocol 🥳

In the future, it could gain additional utility, like being eligible to the yield generated through other DFX protocol features. 😉
As of now, it is designed to benefit the DFX protocol as a whole by:
  • Allocating voting power to long-term holders / supporters of DFX through veDFX. (Align incentives)
  • Incentivizing and encourages users to participate in the DAO. (Or lock, both are used equivalently)
  • Plug & Play compatibility with other ‘VE’ type ecosystems.
  • Motivation for other DAOs (Curve, Balancer, Aura, etc.) to take a position in the DFX Protocol, beyond just stablecoin swaps.
  • DFX creating a bond-like utility for DFX and create a benchmark APR rate for staked DFX.

Terminology 🤔

Gauges: Each liquidity pool has one and their weight (emission amount) is dependent on how the veDFX holders vote.
Epoch: The time it takes for a certain amount of blocks on the chain to be completed.
Emission: The rate and amount of rewards released to that gauge.
Last modified 11mo ago