What is ve(3,3) by Andre Cronje and what’s so special about it?

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2022-01-08 17:01:12

Over the past week, the DeFi community has been buzzing about a collaborative project between Andre Cronje (the godfather of DeFi) and Daniele (the man behind many notable DeFi 2.0 projects like Wonderland or Abracadabra). Also for this reason, when any new tweet or concept from this duo is dissected in great detail. Today, let’s come to the concept of ticks(3,3) that Andre just mentioned!

What is ve(3,3) by Andre Cronje and what’s so special about it?

Marketing methods “different from others”

Andre Cronje is known as the “Godfather of DeFi”, the man behind many pillar projects on Ethereum like Yearn and also the emerging blockchain Fantom. Contrary to the flashy image of the godfather Andre, Daniele is the recipient of many mixed opinions. Of course, this is undeniably a KOL with a huge fan base, but Daniele also received a lot of criticism for the Olympus (OHM) fork and recently the proposal to “acquire power” at Sushi.

And of course, the combination of two hot names in the community is an event that attracts a lot of attention. With just one tweet attached to the Allocation chart “100% Community” – That is, 100% allocation to the community, Andre has stirred up many of his “children”.

And today’s main character – ve(3,3) – was also tweeted by Andre “briefly” and no less harshly. This tweet quickly spread on the social network Twitter and attracted many retweets from KOLs.

“The only hope for the market to recover and grow again” – Darren Lau tweeted.

According to personal predictions, ve(3,3) will probably be the model used for the upcoming collaboration between Andre and Daniele.

So what is ve(3,3)?

First, let’s start with the (3,3). This is the symbol of the DeFi community, with the meaning that everyone will win together when participating. This win-win model is started with the Olympus DAO. To learn more about the game theory model of Olympus DAO, if you are interested, you can click on the article below!

> See more: Olympus (OHM) – The DAO trend leader or the new “pyramid model”?

Next, with the “draw“, this is the token for the token to be locked into the pool, while giving voting rights back to the user. A good example is the veCRV coin, which is a token that returns “voting rights” when a user locks CRV into the pool.

Thus, the meaning of ve(3,3) is to encourage users to lock tokens into the pool, and at the same time create a “win-win” value model for those who participate.

Notable changes

In the article revealing the model for his new product, Andre outlined three key changes: the emission level changes dynamically on a weekly basis, the benefits for veToken holders, and the NFT application for the veToken locking process.

Flexible emission levels

Emission rate (or the rate at which tokens are released into circulation) is the first change mentioned by Andre. Accordingly, the token distribution rate to the market will be adjusted weekly based on the circulating supply rate.

For example, if 0% is locked, the allocation rate will be 2 million. If 50% is locked, the allocation will be 1 million. And so on, if 100% of the circulating supply is locked to generate veToken, the distribution will gradually decrease to 0.

Benefits for veToken holders

If the total supply is 20 million and the current staked (or locked) amount is 10 million, according to the formula above, the emission rate will be 1 million tokens per week. Thus, 1 million tokens are distributed to the market and will be given to those who lock the tokens. This will create more incentive for users to lock the token.

Combined with the rate-balancing mechanism in part 1, this will be a reasonable counterweight to managing the locked amount of tokens. If anyone is watching the Curve War event (when many platforms stake CRV to gain control of veCRV) will see that these are 2 very reasonable tools.

If anyone wants to abuse token staking to gain control, they will face the problem that the amount of tokens paid out will be lower, thereby preventing the risks that the current Curve model faces.

veToken is formed as NFT

The third change mentioned by Andre is the NFTization of veTokens, making this asset convenient to exchange in the secondary market. If you follow Uniswap V3, you must have heard that the liquidity positions on the V3 platform have also been NFTized.

NFTization of veToken could be the solution to the liquidity problem for veToken. The project will not need to create a liquidity pool for this asset like Convex is doing with cvxCRV:CRV.

Ending

Personally, I think this is a development derived from previous changes such as veToken or model (3,3). Therefore, some of the limitations of the old model will still be somewhat embedded in this new product.

Recent marketing shows that this will most likely be a Fairlaunch project, so it is difficult to avoid the fomo of the community. You need to research carefully if you want to join the project when it launches. At the same time, ETH is inherently a place with expensive fees, with a large number of bots, so I personally think it is necessary to avoid fomo when the project has just launched.

Above are explanations about the concept of ve(3,3) – a new concept mentioned by Andre, and personal comments about Andre Cronje’s upcoming project. Hope this article brings a lot of value to you.

Note: The above article is for informational purposes only and should not be considered investment advice!

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