What are the potential benefits for Token holders when Balancer launches veBAL?

特邀专栏作者

2022-03-29 12:00

This article is about 917 words, reading the full article takes about 2 minutes

By locking 80/20 BAL/WETH of BPT, users will get veBAL for governance.

Original compilation: 0x9F, Rhythm BlockBeats

This article is based on the official views of the decentralized trading platform Balancer on social media platforms, and BlockBeats organizes and translates them as follows:

There are several key points in the implementation of the new Token economics model, let's take a look:

By locking 80/20 BAL/WETH of BPT (Liquidity Token certificate of Balancer fund pool), users will obtain veBAL for governance. The longer they agree to lock, the more veBAL they earn and the higher the governance multiplier.

There are also some potential benefits for veBAL holders:

Lockers will receive 75% of the protocol fee

50% of the swap fee accumulated on Balancer Protocol is charged as a protocol fee. Therefore, equivalent to 37.5% of all fees will be allocated to veBAL holders, and having more veBALs can have more agreement fee shares.

If the swap fee for a given epoch equals $1 million, the protocol fee share will be $500,000. The DAO treasury will receive $125,000, while veBAL holders will be able to distribute $375,000. (This example is for calculation only and is not a financial guarantee or commitment.)

veBAL will be used as a voting mechanism for governance measures

veBAL will also be used as a voting mechanism for governance measures to determine which pools can receive BAL's liquidity mining rewards. This means users can direct liquidity mining incentives to pools of their choice. Which brings us to our next question - BAL Battle.

image description

This diagram helps illustrate how bribery works

But there is one more potential benefit worth highlighting - increased BAL rewards for veBAL holders.

Instead of the original liquidity mining rewards, where liquidity providers were only rewarded based on their share of total liquidity, we will now implement a multiplier based on a time-lock mechanism. The longer you lock the same amount of BPT, the higher the reward.

Based on the new mechanism, if you lock the same number of Tokens but twice as long as others, you will get twice the voting rights and the matching benefits twice.

BAL supply schedule confirmed

Additionally, the supply schedule for BAL has been determined and will be set permanently. The current weekly supply of 145,000 BAL is not sustainable without a supply cap. There are two important changes to the new inflation schedule.

First, the new inflation schedule will be to halve the inflation rate every 4 years.

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