veFive
Vote-locked tokens, often referred to as veTokens, are tokens that holders voluntarily lock for a specified duration. In return, holders gain the ability to influence the governance of a protocol. These tokens are typically non-transferable and often come with added perks, including governance privileges.
The concept of veTokens addresses two fundamental challenges in the crypto space: liquidity and active participation. Most crypto-economic models prioritize these aspects. Protocols aim to secure substantial and enduring liquidity, often called "sticky liquidity," while aligning token holders with the protocol’s overarching mission.
By locking tokens, users earn governance rights and a share of protocol revenues. Over the past year, revenue-sharing mechanisms have emerged as a crucial value driver for many tokens. Investors are moving away from governance tokens that lack tangible economic incentives, a shift driven by the diminishing value of DeFi 1.0 assets. Additionally, the veToken model introduces boosted yield opportunities, enhancing its appeal to token holders.
veFive
DeFive introduces veFIVE, a revolutionary staking system designed to reward users while giving them the power to influence the platform’s direction. Unlike traditional staking, where tokens can often be unlocked without added benefits, veFIVE brings a new level of engagement by combining rewards with governance capabilities.
When you lock your FIVE tokens on DeFive staking, you receive non-transferable veFIVE (vote-escrowed FIVE), a tokenized representation of your locked stake. The amount of veFIVE you receive depends on how manytokens you lock and for how long. This system incentivizes long-term commitment by rewarding users who are more deeply invested in the protocol.
Key Features of veFIVE
1. Customizable Lock Period
Users can choose how long they wish to lock their FIVE tokens, with longer lock durations resulting in a higher veFIVE balance. This flexibility incentivizes long-term commitment while allowing users to tailor their staking strategy.
2. Earn Rewards
20% of all FIVE emissions are allocated as rewards to veFIVE holders, providing consistent and meaningful returns.
Bribes: Apart from earning FIVE, veFIVE holders can vote for gauges to claim bribes from external bribe marketplaces. These bribes are usually submitted by external project teams. This serves as an additional source of yield for veFIVE holders, and also diversifies the type of tokens they receive as yield.
B2M priorities: veFIVE holders will have priorities on further rounds of burn-to-mint events on DeFive.
3. Governance Power
Holding veFIVE gives users a say in key platform decisions, including:
Farm APR Adjustments: Vote to increase or decrease rewards for specific liquidity pools.
Farm Listings and De-Listings: Decide which farms should be added or removed based on performance and ecosystem needs.
Hard-Cap Adjustments: Participate in DAO decisions to decrease FIVE’s hard cap, directly influencing the tokenomics and scarcity.
and more
4. Strengthen the Platform
By locking FIVE tokens to gain veFIVE, users reduce circulating supply, contributing to token scarcity and helping maintain the platform’s sustainability.
veFIVE feature is scheduled for launch in Q1 2025.
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