diff --git a/content/tokenomics.mdx b/content/tokenomics.mdx index 52dbf72..ce62195 100644 --- a/content/tokenomics.mdx +++ b/content/tokenomics.mdx @@ -1,5 +1,25 @@ # Tokenomics +## Value Distribution + +Velodrome operates as a zero-leak economy, where 100% of value is distributed to contributors to the system: the veVELO token operators who coordinate and optimize the flow of liquidity, and the liquidity providers who make low-slippage trades possible. + +The protocol has two revenue streams: +* 100% of swap fees generated by staked liquidity + a percentage of swap fees generated by unstaked liquidity in specific emissions-eligible pools +* 100% of voting incentives + +Liquidity providers (LPs) on Velodrome can choose to stake their deposit in emissions-eligible pools to earn VELO (Velodrome's native token), or leave their deposit unstaked to earn a share of trading fees. + +All protocol revenue is internalized and distributed to token operators, a diverse and global stakeholder group composed of institutional investors, protocols, retail traders, and more—any and all tokenholders are on equal footing, earning according to their participation without privilege or preference. This is an open and decentralized network anyone can join by locking VELO. + +The Velodrome Foundation, the protocol’s neutral steward, and Dromos Labs, its core contributing development company, both earn revenue through participation in this system. + +The Velodrome Foundation uses its share of revenue to grow the platform with efforts like token buybacks. Dromos Labs uses its share to fund ongoing development. To ensure long-term competitiveness, Dromos Labs is also allotted a small percentage of weekly VELO emissions (100% of which is compounded into its max-locked position). + +This token-centric economic system aligns the interests of all stakeholders—LPs, traders, and tokenholders—to help Velodrome maintain maximum efficiency and sustainability for the long term. + +--- + Velodrome Finance uses two tokens to manage its utility and governance: - `$VELO` — ERC-20 utility token of the protocol