veToken Model

Dolphin.fm applies and enhances the vote-escrowed (veToken) model, aiming to encourage long-term decision-making, align incentives across protocol stakeholders, and create favorable supply and demand dynamics for price appreciation.

$veDOL Staking and Redemption

Users obtain $veDOL by staking $DOLFM. The longer the staking period, the more $veDOL is earned. $veDOL cannot be transferred or sold but can be redeemed for $DOLFM every quarter. The redemption quota accumulates linearly from the first day of staking. For example, if a user is to receive N $veDOL over the locking period, each quarter of the first year, N/4 $veDOL can be redeemed into $DOLFM.

Formula for $veDOL Accumulation:

where x is the number of years.

When a user decides to stake $DOLFM, they start receiving $veDOL at a declining rate over time. The longer the staking period, the higher the initial rate.

Unlocking $DOLFM

• Wait for Lock Period Expiry: Unlock for free when the vote lock period expires.

• Early Unlocking: Users can unlock $DOLFM at any time, but early unlocking deducts rewards by reducing the amount of $veDOL received from the staked $DOLFM. The deduction rate is the minimum value between 0.75 and the time until unlock divided by 2.

Example:

A user stakes 10,000 $DOLFM for 2 years, earning

The APR is 22% if the price remains constant (real APR could be 220% with projected price increases). The distribution rate over time is:

After 1.5 years, if the user unlocks, they receive $DOLFM and have gained 4261 $veDOL.

Governance Voting

$veDOL holders participate in governance voting on key protocol decisions:

1. Buyback and Burn: Decide the portion of the treasury fund for buyback and burn every quarter (initially 50%).

2. Minting Algo parameters: Set the speed of new token generation.

3. Product Currency Support: Determine which tokens are supported by the built-in products.

4. Minted Token Distribution: Allocate the distribution of newly minted tokens into each vault based on $veDOL votes, incentivizing product participants to stake $veDOL for higher returns.