Thread by @JackNiewold

ve(3,3) could change DeFi forever.

@andrecronje, @danielesesta, and @FantomFDN have banded together to create a new, secretive, and highly anticipated project.

Here's a thread of everything we know (and some speculation) on the protocol:

Also, how to play the trade: 🧵👇

THE TOKEN: Currently referred to as ve(3,3), it's speculated from the below (censored) image that it will be called 'SOLID'.

It will use the same:

• 've' (vote escrow) mechanics as protocols like Convex and Curve
• staking/dilution mechanics (3,3) as OlympusDAO.

Vote Escrow: locking for longer periods of time gives you higher rewards and a larger share in voting the governance of the protocol.

But you have to lock and thus cannot sell your tokens

( $CVX and $CRV )

If you're confused, check out this thread:

https://twitter.com/JackNiewold/status/1476334616797749248?s=20

(3,3): The protocol is worth a minimum of its treasury value. It trades at a premium to this treasury value.

Larger premium, higher APY.

Tokens 'rebase' over time, giving you more tokens but lowering the asset value backing each token.

Fees get added to the treasury.

($OHM)

You can't sell most 've' tokens: they're stuck in your wallet.

With this new protocol, though, 've' tokens become NFTs, meaning you can sell them on the open market.

Suddenly you've created a secondary market for locked governance tokens: a way to sell voting power.

Combine it all for an asset with:

• a deflationary supply ('ve')
• an ability to free float relative to treasury
• a way to distribute fees directly (fees added to the treasury, no buybacks/burns/distributions)
• a secondary market for governance

https://twitter.com/JackNiewold/status/1477723176708624384?s=20

TOKENOMICS:

• Higher % of supply veLocking yields less emissions, incentivizing MORE locking
• Longer veLocking yields a higher APR, incentivizing LONGER locking

The initial distribution will be airdropped so it's 100% decentralized and community run from day 1.

What does it do? How does it make $?

Basically, it's a new exchange, an AMM like $UNI, $SUSHI, $JOE, etc.

But instead of being controlled by liquidity providers (LPs), it's controlled by the protocols.

A ground-up AMM, giving projects more control over inflation/emissions.

It's another response to the mercenary LPs that have controlled crypto exchanges.

Stage 1: Centralized Liquidity (CEXes)
Stage 2: Mercenary Liquidity (DEXes with LPs)
Stage 3: Protocol Owned Liquidity (Protocols become LPs)
Stage 4: Protocol owned AMM (ve(3,3))

A side note: @andrecronjetech has worked on a way for LPs to simultaneously LP and write options, which could potentially eliminate impermanent loss.

Another improvement to mercenary liquidity models where protocols have to please LPs:

(this may/may not get integrated)

But I've got some bad news for you degenerates: you can't just buy this new token on the open market.

It will be distributed to the top 20 protocols on $FTM by TVL

Which means that if you want to play the trade, you've got a few choices.

1. Buy $FTM: The whole Fantom ecosystem will draw attention & TVL if this succeeds.

2. Ape into a top 20 $FTM protocol: the only way to get (indirect) ownership of the token for now is to own any/several/all of the top 20 tokens on $FTM by TVL

Or, buy $KP3R: currently an ERC-20 token but soon to come out on $FTM

Why? While you might not be able to get your hands on the OG token ( $SOLID? ), $KP3R is switching over to a ve(3,3) model as well.

So if this crazy new model works, $KP3R = 🚀🌕

If this works, it will completely change how protocols operate and could help fix expensive protocol emissions.

Which means the model of ve(3,3) could turn the tide in governance and liquidity wars.

Probably nothing.

Like the thread? Please do me a favor!

1. Give me a follow: @jackniewold, I write data-backed threads on altcoins
2. Give that first tweet a favorite/RT. It helps the thread get seen by more people. 👇

https://twitter.com/JackNiewold/status/1481007067142008838?s=20

Last thing: I'm the founder of Crypto Pragmatist, a research publication on small-cap altcoins.

We'll be writing a report on something directly related to ve(3,3) next week, so don't miss it.

Subscribe by clicking on the link below: cryptopragmatist.com/sign-up-twitte…

Important Edit: follow and get your info from @AndreCronjeTech, not @andrecronje.

Mistagged but it’s too late now