Understanding PLY & veNFTs
PLY is a fungible FA1.2 token and vePLY an NFT.
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Alice earns fees and bribes by voting. Boosting multiplies the LP token staking rewards by 2.5x.
Similar to Curve’s
veCRV, vePLY (and its associated voting power based on the duration of the lock) functions primarily around governance, gauge rewards, and gauge voting. It also serves as a reward booster, as liquidity providers (LPs) that hold vePLY receive 40%-100% of the reward. Users receive more voting power the longer they lock their tokens, which helps keep value locked within the protocol.So users that own
PLY that wish to participate in voting and receive a share of the revenue generated by the protocol can lock their PLY for a given amount of time and receive a vePLY NFT. This time lock can last as short as a week or as long as four years. Once a PLY lock is created, a user can vote on different gauges to receive trading fees from the gauges that the user has voted for. The following is a general overview of the different time lock based voting rights:- Four Year Lock: 1
PLY= 1 vote - Two Year Lock: 1
PLY= 0.5 vote - Six Month Lock: 1
PLY= 0.125 vote
Similar to Curve’s vote-escrow token design, a user’s
vePLY voting power decays linearly over time and must be actively renewed to avoid decay. Although this is not a novel mechanism, it does help keep constant locking pressure on PLY. Once the given time lock expires, the original PLY deposit can be withdrawn from the lock.- If you lock 1000
PLYfor 4 years, you get avePLYNFT with an initial voting power of 1000. - If you lock 1000
PLYfor 3 years, you get avePLYNFT with an initial voting power of 750. - In a similar way, you get 500 for 2 years, 250 for 1 year and so on in a linear way. The longer the duration of your lock, the higher your initial voting power.
As mentioned before, this voting power also decreases constantly at the same linear rate. So, if you have 1000
PLY locked for 4 years and received a vePLY with initial voting power as 1000 - after a year, the voting power will be reduced to 750. By the end of the lock, the voting power would reach zero.Another iteration on existing vote escrow models is that the dilution of existing early
PLY locks is actively mitigated. A game theoretic application intended to keep PLY staked for longer periods of time is applied through the provision of emissions. In short, PLY locks also receive a share of PLY emissions, based on the circulating supply. As more token holders lock, therefore, less PLY rewards are distributed to LPs.We have modified the math of the original first two principles of ve(3,3) to allow decent incentives for protocols that join later in the future.
- 1.Weekly
emissionsare adjusted as a percentage ofcirculating supply
The
real emission that the users receive is related mathematically to a base emission as follows:Meaning, if the weekly
base emission is set at 2,000,000. Then, if 0% of PLY is locked for vePLY, the entire 2,000,000 is emitted. If 50% of PLY is locked for vePLY, the weekly emission would be 1,500,000. If 100% of PLY is locked for vePLY, the weekly emission would be 1,000,000.2.
ve locks increase their holdings proportional to the weekly emissionThe locked PLY supply is inflated to prevent dilution as:
Assume a 1,500,000
PLYweekly emission, a total_supply of 20,000,000 PLY, and a locked_supply of 10,000,000 PLY. This would mean that 1,500,000 are minted and provided as incentives. Then, according to the math, total locked supply would be inflated by 3,75,000 PLY.3.
vePLY is transferable as an NFTBy tokenizing the lock position we allow a single address to own more than one lock. Lock balances are cumulative and each lock contributes to the overall voting power. This further allows locks to be traded on secondary markets, as well as to allow participants to borrow against their locks in future lending market places. By extending locks into NFTs, the capital inefficiency problem of ve assets, for example in DeFi protocols like Curve, is solved.
Last modified 5mo ago