Overview
veTokenomics, or vote-escrowed tokenomics, is a model where locking tokens grants voting power and boosted rewards. Users lock tokens for a period and receive veTokens in return. It aligns long-term holders with protocol success.
How It Works
Users lock their tokens for a chosen duration, receiving vote-escrowed tokens whose voting power decays with remaining lock time. veToken holders vote on reward distribution and governance. Longer locks earn more power and often higher yields.
Why It Matters
veTokenomics reduces circulating supply pressure and concentrates governance in committed holders. It was popularized by Curve and adopted widely in DeFi. Its trade-off is reduced liquidity for locked tokens.
Related Concepts
veTokenomics is central to Liquidity Mining and governance in protocols like Curve and Convex. It connects to the broader field of Tokenomics.