veCONE
In CONE Swap, liquidity providers receive CONE incentives from emissions instead of swap fees. veCONE users receive all swap fees generated by the gauges they voted for.
This structural feature makes veCONE the best system for returns when voting for gauges that generate the highest amount of swap fees. The gauges that receive more votes will receive more CONE rewards from emissions, becoming even more attractive to liquidity providers. Thus, the more votes a gauge gets, the greater the rewards distributed to the gauge. This system attracts more TVL and provides more depth of liquidity, reducing swap costs, attracting more swaps and generating more fees, increasing returns to veCONE.
veCONE
veCONE governs Cone Swap. Users can get veCONE by locking CONE. The amount and time of locking a user chooses, gives a different amount of veCONE. Every 1 CONE locked for 4 years is represented by 1 veCONE.
1 CONE locked for 4 years = 1 veCONE
1 CONE locked for 2 years= 0.5 veCONE
1 CONE locked for 6 months= 0.125 veCONE
Like Curve's ve System, veCONE also decays linearly over the entire locking period. The ve system structurally provides greater user governance engagement over the platform. CONE uses this system to provide engagement and produce opportunities for cooperation and mutual gain for users with different goals. Users can benefit from the ve(3,3) system in the following ways:
Maximize veCONE and collecting fees from the most productive gauges.
Provide liquidity and farming CONE rewards.
Collectively lock a high percentage of CONE supply, reducing emissions and future total supply.
Voting
With veCONE locked for a period determined by the user, it is possible to vote for gauges. When voting for gauges, gauges will receive shares of emissions in proportion to the votes they receive. These emissions are a vital feature of veCONE; users get the biggest economic incentive in a period of high trading volume by voting for gauges that produce the most fees. But they still can vote for gauges with a relatively smaller volume to favour a preferred asset. The simple decision-making power over votes already gives veCONE huge advantage.
veCONE can also downvote a gauge; this protection measure prevents spam from vaults or other malicious activities and is also a feature in the competition for farming governance tokens. Users can downvote gauges that provide some competitive factor to their farming strategy.
Voting lasts for one week; if a user increases the number of locked tokens, there is no need to vote again. It is only possible to change votes after a week; this measure provides greater stability to the bribe system. Voting for a gauge can be attractive for protocols to increase the liquidity of their native tokens and to increase the incentives distributed to the most productive gauges.
All swap fees generated by a pool are automatically attached to its gauge as bribes; through this mechanism, voters collect all fees from gauges they voted for. Gauges that produce more swap fees become more valuable, attracting more votes.
Protocols that hold veCONE can incentivize the liquidity of their native tokens simply by voting for their gauges; this will increase the CONE distribution to the gauge, and the protocol will collect swap fees. Each epoch of votes lasts for one week, and at the end of each epoch, the system distributes rewards according to the votes for that week. The voters can then collect their bribes.
Voting Summary:
Users will be able to vote ONLY ONCE a week. PS: The voting week starts when a user votes on a gauge.
When a user clicks RESET, CONE clears votes on the gauges, and the user will not be able to vote until the duration ends. The system will not count votes after a reset, so bribes & fees do not apply. Therefore, users should exercise caution with the RESET function.
A DELAY error will be displayed if a user tries to CAST a vote after clicking reset.
Uses of Reset:
Reset allows users to withdraw locked CONE after the voting time expires.
NFT transfer requires a reset of votes, unstaking the LP from the gauge deposited and a transfer of the same LP.
Fees and Bribes
When voting for a gauge, veCONE directs emissions to the gauge, increasing rewards for gauge LPs and, in return, receiving all swap fees generated by the gauge.
Voting for a gauge can benefit veCONE in two ways, collecting bribes attached to gauges and receiving all swap fees for the gauge they voted for in proportion to the number of votes directed to the gauge.
Bribing a gauge is also possible in CONE. Protocols can increase the liquidity of their native tokens through bribes rather than distributing incentives; this practice can sometimes be a more cost-effective alternative. Users can attach bribes to a gauge to attract more votes and increase CONE rewards targeted to the gauge.
Rewards
veCONE lockers also receive rewards from emissions. Approximately 30% of the supply distribution will be distributed to veCONE. With this part of the supply going to veCONE, the limited supply is expected to significantly reduce the selling pressure of CONE. There is also a possibility that locking up a high percentage of the supply will provide monetary benefits through the appreciation of the CONE for all Cone participants.
The distribution of emissions for veCONE also provides even more attractive incentives when there is a low % of CONE locked, providing more APR for users who lock CONE. As 30% of CONE emissions are distributed to veCONE, the probability of obtaining an optimal amount of supply locked is more, resulting in a further deceleration of emissions and a scarcer total supply of CONE in the future.
Users get rewarded for providing liquidity and for holding veCONE. The liquidity rewards are immediately distributed to a user's wallet once the user claims them. On the other hand, rewards from holding veCONE get locked in veNFT and increases the user's voting power.
Getting veCONE
Users can obtain CONE tokens by:
Staking LP in gauges.
Locking CONE tokens.
Receiving CONE rewards from emissions (veCONE lockers)
Buying CONE in the market.
NFT & Boosting
veCONE are NFTs; this feature provides the possibility of integrating veCONE with other protocols related to NFTs. Another benefit of veCONE is that the NFT can be attached to all user's LP positions providing boosted rewards. It is possible to have multiple NFTs with different amounts of veCONE and locking periods. Although having many NFTs can provide more flexible management, LP boosting is more effective when concentrating veCONE in a single NFT, as only one NFT can be attached to a gauge.
CONE uses the following formula to calculate the boosting effect:
Summary about Merging
To merge NFTs:
Users need to detach NFT 1, meaning a user needs to reset votes and unstake LP.
All the token amounts in NFT 1 will be merged to NFT 2. NFT 2 doesn't require any detachments.
Since we reset votes on NFT1 during the merge, which will be burned, there will be no bribes anymore. NFT1's veCONE rewards will also be lost.
Benefits
In a nutshell, veCONE provides the following benefits:
Vote Delay
CONE has one week of voting delay. This means that veCONE users can change their votes only after a week. That way, once they cast a vote, they cannot change it before a week. This measure ensures that when voting, veCONE is committed to the gauge at least until the next epoch.
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