In 2021, Curve Finance introduced the groundbreaking veToken model, which has since revolutionized the DeFi space. Following this innovation, other protocols have followed suit. Beluga Exchange has adopted the VeToken model with additional enhancements to provide increased flexibility and earning potential for the benefit of its users.
What Are VeTokens and What Are Their Benefits?
Ve stands for Voting Escrow — a mechanism of locking up tokens (e.g., veCRV for Curve) for a set period for the following purposes:
- Governance Voting
- Earn Staking Rewards
- Gauge Weight Voting
The duration of the token lock represents a user’s commitment to the protocol. As a result, users who lock their tokens for longer periods receive higher staking rewards and have greater influence in voting and future emission distributions. This model helps the supply and demand of native token by reducing selling pressure and circulating supply. This arrangement benefits both users and stakeholders, creating a win-win situation.
The Innovation of Beluga’s veToken model
While the Curve’s veToken model is innovative, the original implementation has its limitations. Curve’s locking model favors early investors and whales, and users can only set one locking position at a time, limiting their ability to allocate assets freely.
Beluga has adopted the veToken model and introduced improvements to enhance inclusivity for its users. Beluga implements a rather liberal mechanism for staking BELA, where users are able to stake their BELA for an arbitrary period of time. However, upon unstaking, the staker will have to forgo a portion or all of their veBELA holdings. In the long-term, ideally spekaing, BELA stakers will find it more profitable to keep their staking position rather than unstaking and dumping BELA for gains, even when BELA price is rocketing. Beluga will ensure that the protocol and users converge on a shared interest by directing partner allocations, protocol revenues and farming incentives to veBELA holders, and in Real Yield too.
In the long-term, veBELA holders will enjoy the following benefits:
- Governance Voting
- Boost Farming Rewards
- Gauge Weight Voting
- Earn Real Yield
- Priority Whitelisting for Parnter Airdrops
Empowering Composability
Beluga’s simple calculation and algorithm make it an ideal foundation for projects such as yield aggregators and lending/borrowing platforms to build upon. Additionally, Beluga plans to establish incubation labs, where tokens from incubating projects will be injected into the treasury and rewarded to Beluga users, ensuring a sustainable annual percentage rate (APR).
About Beluga Protocol
Beluga Protocol is a multichain stableswap AMM that uses unilateral liquidity provision and layer3 infrastructure to reduce slippage for stablecoin swaps.
Beluga’s vision is to drive DeFi growth and push boundaries by enhancing capital efficiency, user experience, and scalability in a multichain ecosystem.
To learn more, visit https://arb.beluga.so or follow us on the socials below:
