⚙️ Technical Concepts

ve(3,3)

Tokenomics model combining vote-escrow locking with (3,3) cooperative game theory

Definition

ve(3,3) is the tokenomics model that merges Curve's vote-escrow mechanics with OlympusDAO's (3,3) game theory, first shipped by Andre Cronje's Solidly on Fantom in early 2022 and then cleaned up by Velodrome on Optimism and Aerodrome on Base. Holders lock the emission token for up to four years into a transferable veNFT, and each week they vote on gauges to direct the next emission batch. The twist versus veCRV is that voters receive 100% of the trading fees of the pools they vote for, plus any external bribes, so voting power is priced directly against the revenue it can capture. Lockers also receive a rebase that offsets part of the emission dilution, which is where the (3,3) framing comes from: locking is supposed to be the dominant strategy. In practice the model turns liquidity into an auction where protocols rent depth by paying voters, rather than the DEX paying for liquidity out of its own treasury.

ve(3,3) turns liquidity into an auction. Protocols pay voters to send token emissions to their pool, voters collect those payments plus the pool's trading fees, and the DEX itself stops paying for liquidity out of pocket.

Example

On Aerodrome, a protocol that wants deeper liquidity for its token does not pay LPs directly. It posts a bribe of, for example, $20,000 to its gauge for the week. If total voting power is 100M veAERO and the bribe attracts 4M votes, those voters split the $20,000 plus that pool's trading fees. The gauge in turn receives its share of weekly AERO emissions, which is what actually pulls LPs in. Paying $20,000 to direct $60,000 of emissions is a 3x return on rented liquidity, and the gap between bribe cost and emission value is the number every protocol treasury watches.

How it works

Lock the emission token for up to four years and receive a veNFT. Every week, vote on which pools get the next emission batch. You earn 100% of the trading fees of the pools you voted for, plus any bribes posted on those gauges, plus a rebase that offsets part of the dilution.

Why it matters

It is the dominant design for DEX tokens outside Uniswap, and it changes who pays for liquidity. Understanding it tells you whether a farm's yield is real revenue being redirected to you or just a token being printed against your position.

What to check

Compare weekly emissions issued against your voting power with the fees and bribes it collects. Then look at lock duration, veNFT secondary liquidity, gauge whitelist control, and whether bribe spend is still growing or drying up.

Risks to Consider

Vote-buying attracts mercenary liquidity: depth disappears the week the bribes stop
Locks are illiquid; veNFTs usually trade at a discount to the underlying token on secondary markets
Bribe economics reward whoever pays most, not the pools that generate the most real volume
Aggressive rebase designs (Solidly's original) dilute anyone who does not lock, pushing the token toward a permanent lock-or-lose choice

Common Questions

How is ve(3,3) different from veCRV?

Three practical differences. Voters get 100% of the fees of the pools they vote for instead of a share of all protocol fees, which makes each vote a direct bid on a specific revenue stream. Emissions adjust to the circulating supply rather than following a fixed schedule. And the lock is an NFT, so a position can be sold or used as collateral instead of being frozen for four years.

Does the (3,3) part actually produce cooperation?

Only while the token price holds up. The rebase makes locking rational relative to holding, but it does nothing about people who never bought in the first place. Solidly showed the failure mode: whitelisted actors farmed emissions and sold, the price fell, and the rebase simply redistributed a shrinking pie. Velodrome and Aerodrome had to add emission decay, a controlled whitelist and real fee revenue to make the loop hold.

What should I look at before locking into a ve(3,3) system?

Weekly emission value versus weekly fees plus bribes. If a full lock earns you, say, $1.10 of fees and bribes for every $1.00 of emissions issued against your position, the system pays for itself; if it earns $0.30, you are being diluted and the yield is just your own token coming back to you. Also check the lock duration, whether the veNFT has a liquid secondary market, and who controls the gauge whitelist.