What’s veTokenomics? Analysis of 20 veToken Ecosystem Protocols

Recently an increasing number of DeFi protocols announced switching to veTokenomics model: Yearn Finance, Synthetix, Pancakeswap and Perpetual protocol.

In this article I ventured to understand why, how veTokenomics works and what makes it special.

The analysis covers 20+ vote-escrow (ve) ecosystem protocols.

I analyzed the protocols by type of veTokenomics, TVL, percentage of supply locked, APR, average lock time and unique features/changes done to the original Curve veToken model.

Note that the TVL, APR etc. is fluctuating constantly and is for reference only.

The full table is accessible here.

Why veTokenomics?

Summer of 2020.

Compound Finance launches liquidity mining (LM) starting the DeFi bull run.

Millions of dollars flow into Compound smart contracts. Liquidity providers (LPs) maximize returns by lending and then borrowing the same asset just to lend it out again.

Balancer follows with its BAL LM campaign. Andre Cronje gives away YFI ‘valueless token’ as a fair launch. Forks of Uniswap …