Vote Escrowed (ve) model explained
The vote-escrowed model was first introduced by Curve Finance, a DEX that specializes in low-slippage high-volume trading of pegged assets. The model involves locking tokens for a period of up to four years in exchange for boosted governance and rewards on the platform.
Typically, the native token (e.g. $CRV) is the one that is locked and then converted into the vote-escrowed form (e.g. veCRV)– the governance token.
By locking their tokens, holders gain the right to vote on decisions and control where emissions are directed – the longer the governance token is locked, the more voting power holders receive.
Being able to direct token emissions towards a pool means that holders have the power to choose where liquidity providers of such pools will receive greater rewards and thus attract more liquidity.
The Ve token is usually used to earn platform fees, vote on governance, receive boosted pool rewards, and acquire possible bribes. veUNO will bear a close resemblance to this model but with some minor tweaks.
The Uno Re protocol native token ($UNO) will need to be locked for a certain period of time to receive the governance token (veUNO). This new governance enables users to participate in voting. Voting power will be central to the functionality of the Uno Re platform since it dictates gauge weights to SSIP pools which itself dictates the number of reward emissions those pools receive.
These emissions (paid in $UNO) will most likely control the flow of liquidity (underwriting capital) into the protocol. Pools that receive a large vote allocation (and thus have a high gauge weight) can expect more liquidity since liquidity providers (LPs) will want to earn higher emissions. In the same way that Curve does this to generate deeper liquidity for certain pools, Uno Re aims to use this model to generate deeper liquidity in its Insurance pools aka SSIPs and SSRPs.
The veUNO holders can also vote on adding SSIP pools, emissions on the same, Solvency Capital Ration, Minimum Capacity Ratio, and more.
It will be possible to lock $UNO for up to 4 years with lockers receiving veUNO corresponding to the duration of the lock - the longer the lock, the more veUNO you receive. Since veUNO is the governance token, those that lock for longer will have more control over liquidity distribution on Uno Re. In addition to this, veUNO provides holders with platform fees and boosted pool rewards. Similarly to veCRV, the amount of veUNO a user has will decay over time as an unlock approaches to ensure that holders with a long-term investment in UNOre have a greater say in governance.
Disclaimer - this current mechanism of revenue/fee distribution is subject to change in the future via DAO-approved protocol change proposals (UIPs).
- 2.Click on the "Connect wallet" button to connect to dApp. Once connected, you may need to switch to the Ethereum Mainnet network. If prompted, select the option to switch to the Ethereum Mainnet network in your wallet.
- 3.Take a deep breath and lock your $UNO:
- Enter the amount of UNO you want to lock
- Then, select the period you want to lock your UNO
- Hit the Create Lock button and Accept the transaction in your wallet. If you are making locking for the first time - you will be asked to approve the token before you can lock. Both Approve and lock actions need gas for the transaction.
- 4.Claim your UNO Yield :
In the “Your VE Rewards ” section click on the Claim Rewards button and Accept the transaction in your wallet.
5. Vote on Proposals :
Vote lock: $UNO holders will be able to lock their tokens for up to 207 Weeks (~4 Years) in exchange for veUNO. Your governance power within the protocol is calculated using the below formula:
veUNO = Number of Tokens * (Lock duration in weeks / 207 weeks)
Note that after locking, your veUNO:
- is non-transferable and cannot be redeemed for $UNO until the lock duration ends
- the supply of veUNO in your wallet will decrease as the unlock period approaches
- can be used for governance voting, platform rewards, etc.
Each user who vote-lock's their $UNO is automatically allocated a certain portion of the pooled rewards via the yieldDistributor contract and the total APY for veUNO rewards is calculated as:
Overall APY = (Daily emission * 365 / totalveUNOsupply)
Daily emission = yieldRate * 86400
For the moment, Until other utilities are slowly rolled out, veUNO stakers will be able to:
- Receive yield from protocol fees and from $UNO rewards
- Deciding on new SSIP vaults
- Deciding on new Product listings, pausing and delistings
- Deciding UNO V2 Parameters
- Voting on governance proposals
- Holders with >1k veUNO (1k uno taked for 4 years) will be able to receive early access to the RWA pools and capped asset management vaults.
- Electing paid Olympus Council members
- Reward emission rates on SSIP and SSRP vaults
- Deciding on future incentives for all our products
- Voting on Gauge weights to decide on SSIP reward emissions
- Voting on Depeg Strike rates for Isolated Depeg Hedge Vaults