Thread by @JackNiewold

The ve(3,3) alpha is finally here:

@AndreCronjeTech and @danielesesta went on @_FrogRadio today to drop info on their new protocol, Solid Swap (confirmed name: $ROCK).

A thread of the biggest takeaways from the Twitter Space hosted by @CryptoMessiah and @randomtask555 👇

Andre Cronje and Daniele Sestagalli are dropping a new experiment referred to as ve(3,3).

I wrote a thread on it last week that should get you up to speed:

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

The first thing to understand with this new protocol is the idea of vested escrow (ve).

This was invented by $CRV, backed by a simple idea:

The more you commit to a protocol (with $CRV, by locking up your tokens), the more voting power you get in the future of that protocol.

Curve (and its token, $CRV) is an very powerful protocol in that it:

• Helps stablecoins hold their peg
• Can direct rewards gauges for liquidity providers
• Boosts personal liquidity provider rewards

Which makes the token valuable, but the LOCKED token even more so.

The Convex ($CVX) came in.

You can give Convex your $CRV for $CVX. They lock the $CRV up for full voting power, but you can still sell the token.

So $CVX has the voting power of a ton of veCRV, but it's liquid.

LPs get more power owning $CRV than $CVX.

1 $CVX = 8 $CRV

This got to the point where $CVX now completely controls $CRV

Tons of metagames exist within this protocol, each of them

$CVX locking, $crvCVX, $BTRFLY, bribing, Votium.

The most important? This game is not for individual investors.

It is for protocols.

Andre's thought:

What if these models and ideas apply to other AMMs as well, not just CRV?

That's where his new protocol comes in.

The same mechanics as $CRV / $CVX to incentivize long-term thinking, but on a standard AMM.

The end user has to be the focus for all products.

CRV and CVX incentivize TVL, giving fees to whatever pool has the most TVL (thus voting power).

But they don't provide the best fee rates for long term user. This favors LPs over users.

$ROCK strives to reward the users.

$ROCK designers also wanted to incentivize adoption on Fantom.

This is why they proposed to distribute their new token based on a snapshot of TVL on DefiLlama for the top 20 $FTM protocols.

This creates a flywheel effect, bringing new users and capital over to Fantom

How will this be distributed?

Still, not a lot of answers. The token will be distributed locked, so protocols can't just give it away immediately.

They didn't want to raise any money, and it's experimental.

That's why they've decided to distribute directly to protocols.

The new alpha:

• Protocols like $CVX can still spring up, but they can't completely take over supply, as token locking has to be approved by the DAO.

• You only get fees from pools you vote for, so game theory fully optimizes the protocol for maximum revenue.

• Locking is flexible and allows you to create an NFT of your $veROCK, for a new layer of composability. You can borrow against these NFTS.

Some people asked questions about the point of locking $ROCK if it's suddenly liquid as an NFT

These NFTs represent rights over the tokens, so they can be loaned against/sold, but the tokens remain in the original wallet.

So voting power stays with the original user, I assume.

Abracadabra.money has basically designed a de-facto futures contract that lets you borrow against the locked tokens, with the liquidation only going through AFTER the tokens have been unlocked.

(to my understanding)

Also, $ROCK is fundamentally an $OHM fork, so stakers are rewarded proportionally based on the percentage of the protocol they own.

Game theory encourages people to lock, with more lockers meaning less emissions.

Basically, the entire protocol has been slightly tweaked to maximize for fees, and thus revamp incentives behind the protocol

Think of $ROCK as $CRV, but supporting any asset, dropped directly to the community, with revamped game theory mechanics.

That thread was a bit disorganized but I hope it was a helpful recap to anyone who missed the space earlier today

If you'd like, you can check it out here:

Interested in more threads? Please give me a follow: @jackniewold

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Help me leak the alpha: give the first tweet in the thread a RT/Fav to help get it to more people.

Linked here 👇

https://twitter.com/JackNiewold/status/1483962639579422721?s=20