ve(3,3) for PSY

PSY adopts ve(3,3) model as our tokenomics. Similar to ve(3,3) for Decentralized Exchanges incentivizes liquidity provisioning to whitelisted pairs and accelerate the TVL growth, ve(3,3) for PSY incentivizes its partner protocols to adopt SLSD as currency so that farming incentives of PSY accelerate the adoption of SLSD as a pair or a deposit token.

ve(3,3) model has several variations, and here is how PSY’s ve(3,3) model looks like.

Rebasing

Rebasing is a mechanism that adjusts the supply of a token based on staked amount to Voting Escrow. When there are more tokens staked, there will be less token distributed to the gauges, and vice versa.

$vePSY holders receive a rebase proportional to epoch LP emissions and the ratio of $vePSY to $PSY supply, thus reducing vote power dilution for $vePSY

The weekly rebase amount is calculated with the following formula:

(vePSY.totalSupply ÷ PSY.totalsupply)³ × 0.4 × Emissions

$vePSY supply does not affect weekly LP emissions.

veLock and Boosting

veLock is a mechanism that encourages long-term commitment to the PSY protocol. Users can lock their tokens for a period of time in exchange for $vePSY, which represent their locked tokens. The maximum term for lock is 4 years. The shorter a lock period is, the less the $vePSY amount will be.

These $vePSY can then be used to boost the user's rewards in the protocol, increasing their yield. This mechanism aligns the incentives of users with the long-term success of the protocol. With competitive amount of $vePSY among Gauge system.

Gauge Voting and Gauge

Gauge voting is a governance mechanism that allows $vePSY token holders to influence the direction of the newly minted $PSY. In PSY's ve(3,3) model, there are Gauges for LP tokens which integrate $SLSD or stability pool within PSY protocol, and $vePSY holders can decide the share of new inflation.