48
As seen in this , to name a few, we see how Daniele was upset over the fact that Trader Joe had awarded more emissions to the AVAX/USDC pool as opposed to the MIM/AVAX pool which has a higher volume and liquidity. Essentially, Trader Joe was focusing emissions on specific pools while “ignoring” other high volume trades like MIM/AVAX.
Working closely with Fantom’s main developer, Andre Cronje, Daniele and Andre aim to launch a token and Automated Market Maker (AMM, think Curve.finance). One for the people, or the frog nation, it is called ve(3,3) or at least for now. Check out my on what ve(3,3) actually means.
I would like to highlight a few interesting key points taken from the recent article by . There will be a 0.01% fee on all swaps, the fees are paid out in base assets (If I am not mistaken, this means that if you deposit USDC, ETH, etc you will be paid out directly in that asset), emission incentives fees instead of liquidity and ve(3,3) lockers are in NFT (Non-fungible token) form. This sounds really amazing, especially the NFT part. This allows locked capital to still be “fluid” and one address can have multiple locks, unlinke with CRV where there is only one lock per address, essentially.
There is no presale for this currently, rather they will take a snapshot on Defi Llama of the TVL (Total value locked) of the protocols and the top 20 will be given locked ve(3,3) tokens. From here, it is in the hands of each project to:
- Create their pools
- Vote on initial distribution
- Have the community vote on the initial distribution
What is really cool about this is that the projects have essentially full power over how they want to distribute these tokens to the community. They can decide to concentrate emissions on whatever they want, in this case I see most protocols incentivising their own coins and liquidity positions.
Essentially, in cases such as Curve and other AMM, their income is derived from the trading fees from the pools. Most likely we will see these AMMs voting for emissions on pools that have the highest trade volume, this will incentivise even more liquidity to be concentrated on that specific pool and thus more fees are earned. A circular cycle which can easily be applied to Lending & Borrowing protocols, it is the obvious play to be made especially if your goal is maximise profit through trading fees.
