![]() ![]() ![]() Many platforms offer a veToken multiplier if users opt to lock their tokens for an extended period of time.Īrguably the most important innovation in the field, ve(3,3) is a new mechanism for vote escrow that was first proposed by renowned DeFi developer Andre Cronje in January 2022. The length of the escrow period can vary depending on the specific protocol and the nature of the decision being made. Once the escrow period elapses, the tokens are released and can be used to cast a vote. Usually, a certain amount of time must elapse before users can participate in governance - ensuring they are more likely to act in the long-term interests of the platform.ĭuring this time period, the tokens are "locked" in an escrow account and generally cannot be traded or used for any other purpose. These veTokens typically cannot be traded and are simply used to confer governance rights to their holders. When users lock up their governance tokens, they receive a number of vote-escrowed tokens (veTokens) in return. Most fall into the simple side of the spectrum, making it easy for users to participate and get to grips with the process. Vote escrow solutions range from incredibly simple to rather complex. Many of these platforms require users to lock their governance in an escrow contract to participate in voting - this process is known as vote escrow. These DAOs are essentially permissionless since anybody holding the token can participate in their governance. Many blockchain projects feature community governance - allowing token holders to help shape how the platform operates and evolves through an on-chain voting process between governance token holders.
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