Voting System
Last updated
Last updated
Traditional DEXs face challenges with liquidity incentives, such as token value dilution, short-term capital withdrawals, low liquidity in some pools, suboptimal fee generation, misaligned incentives, voting power imbalances, and unsustainable liquidity mining.
The ve(3,3) model addresses these issues by combining Olympus DAO's (3,3) game theory with Curve Finance's vote escrow (ve) tokenomics, originally devised by , this model assigns users of the DEX the decision-making power on where to direct the weekly emissions. This approach aligns incentives between token holders and LPs, prioritizes fee generation over passive liquidity, and encourages governance participation. By locking governance tokens, users gain higher farming rewards and greater influence in protocol decisions. Users can lock their $SWPx tokens for up to 2 years and get non-fungible veSWPx tokens that represent the voting power — the longer the lock, the greater the veSWPx voting power. Users can use veSWPx to vote on weekly emission allocations and earn rewards from swap fees and incentives each week. The veSWPx token can be transferred, merged, split, or sold on the PaintSwap NFT marketplaces.
Voting occurs weekly, from Thursday 00:00 UTC to the next Thursday 00:00 UTC (an "Epoch"). veSWPx holders vote for pools to determine emission allocations. Pools with more votes receive a larger share of emissions, leading to higher distribution of rewards.
Partner protocols can offer voting incentives to attract votes, driving up token liquidity and price. Pools with more votes receive a larger share of emissions, resulting in higher APRs, which attract more liquidity and reduce slippage. Lower slippage increases trading volume, generating more fees for voters and enhancing the pool's appeal.
