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veFIL

Created
Feb 17, 2022 4:08 PM
Creator
Nicola
Project
Financial applications
Stage
Still Valid

Background on veTokens

veTokens

  • Issue: Voters buying tokens to vote and sell them
  • Initial solutions: locking tokens for some time before voting
  • Curve solution (veTokens): Users get voting rights proportionally on amount of tokens locked and locked time, generally the longer you lock, the more voting rights you have

veTokens in the wild

  • Curve
    • veTokens to give DeFi rewards: the more time users lock them, the more they earn
    • Curve rewards are a fixed amount to be distributed to those that lock tokens ⇒ there is an ever-growing need to lock tokens

  • Yearn
    • Yearn wanted to get the most amount of token rewards in curve and they asked people to lock their tokens with them
    • If you lock tokens with Yearn, you lock them forever and they give you a yCRV that is tradable

  • veTokens boom:
    • Given the success of veCRV generating incentives for people to lock tokens, several protocols have introduced this
    • Gnosis, Yearn, Balancer, PieDAO and many other are introducing veTokens

veTokens in Filecoin

Sectors and IP

  • Sectors+IP can be seen as a veToken with precise contraints
    • The more the amount of Sectors+IP is locked, the more is earned (linear)
    • The more the time a Sector+IP is committed for, the more is earned (linear)
  • FIL+ can be seen as a way to increase the value of a single sector
    • By committing 10x, one gets 10x the power and the rewards

What can we learn from veTokens?

Below some potential ideas on what we could use in Filecoin.

  1. Miners that lock more tokens earn higher rewards (e.g. locking 10x tokens in a non FIL+ sector gives them 2x rewards).
    1. Note that it’s important that investing in storage should always be preferred over locking more capital
  2. Miners that lock sectors (or tokens) for longer earn higher rewards

Proposals

The proposals are to “buy a higher quality multiplier” by either. This is additional to the power multiplier of FIL+.

  1. Allowing SP to lock a higher collateral than required (e.g. locking 10x tokens multiplies power by 2x, in an exponential increasing way (to motivate the locking of 10x))
  2. Locking for longer than the minimum required period (up to a maximum of 5 years).

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