The long-awaited veDPX update is here
After much anticipation, the next phase of Dopex’s tokenomics with the introduction of vote-escrowed $DPX (veDPX) is finally here. Once implemented, holders will be able to lock $DPX for veDPX which is required to receive governance rights and boosted rewards within the Dopex ecosystem. This article will explain the main changes to expect with our new tokenomics.
ve (Vote Escrowed) model explained
The vote-escrowed model was first introduced by Curve Finance, a decentralized exchange (DEX) that specializes in low slippage high-volume trading of pegged assets. The model involves locking tokens for a period of up to four years in exchange for boosted governance and rewards on the platform.
Typically, the native token (e.g. $CRV) is the one that is locked and then converted into the vote-escrowed form (e.g. veCRV)– the governance token.
By locking their tokens, holders gain the right to vote on decisions and control where emissions are directed – the longer the governance token is locked, the more voting power holders receive.
Being able to direct token emissions towards a pool means that holders have the power to choose where liquidity providers of such pools will receive greater rewards and thus attract more liquidity.
The Ve token is usually used to earn platform fees, vote on governance, receive boosted pool rewards, and acquire possible bribes. veDPX will bear a close resemblance to this model but with some minor tweaks.
The Dopex tie in
Dopex’s native token ($DPX) will need to be locked for a certain period of time to receive the governance token (veDPX). This new governance token will enable users to participate in voting. Voting power will be central to the functionality of the Dopex platform since it dictates gauge weights to pools which itself dictates the amount of emissions those pools receive.
These emissions (paid in $DPX) will most likely control the flow of liquidity into the protocol. Pools that receive a large vote allocation (and thus have a high gauge weight) can expect more liquidity since liquidity providers (LPs) will want to earn the higher emissions. In the same way that Curve does this to generate deeper liquidity for certain pools, Dopex aims to use this model to generate deeper liquidity for specific SSOVs.
Specific to Dopex, veDPX holders will also be able to vote on strikes for our SSOV options, strikes for IRO options, Y/N vaults, V2 parameters, and more.
It will be possible to lock $DPX for up to 4 years with lockers receiving veDPX corresponding to the duration of the lock - the longer the lock, the more veDPX you receive. Since veDPX is the governance token, those that lock for longer will have more control over liquidity distribution on Dopex. In addition to this, veDPX provides holders with platform fees and boosted pool rewards. Similarly to veCRV, the amount of veDPX a user has will decay over time as an unlock approaches to ensure that holders with a long-term investment in Dopex have a greater say in governance.
Now time for what everyone has been waiting for! This next section will go over the veDPX “SPECS”.
Ve-Lock: $DPX holders will be able to lock their tokens for up to 207 Weeks (~4 Years) in exchange for veDPX. Locking tokens will be done in an easy, straightforward manner using a slider for users to choose their preferred “locking” duration.The locking UI will be on a specific Dopex website page (the link will be available in the announcement following the release.)
Note that after locking your veDPX:
- Is non-transferable and cannot be redeemed for $DPX until the lock duration ends
- The supply of veDPX in your wallet will decrease as the unlock period approaches
- Can be used for governance voting, platform rewards, etc.
The longer you lock your $DPX, the more veDPX voting power you will receive with the corresponding distribution outlined below:
- 1 $DPX locked for 4 years = 1 veDPX
- 1 $DPX locked for 3 years = 0.75 veDPX
- 1 $DPX locked for 2 years = 0.5 veDPX
- 1 $DPX locked for 1 years = 0.25 veDPX
Everyone locking $DPX will be rewarded with:
- 10k DPX split among all veDPX stakers throughout the 1st year
Shortly after the veDPX release (~1-2 days), all farms will be closed, including the single staking $DPX farm. We will also be terminating all RDPX rewards, consequently ending its dilution.
Since we are doing a step-by-step rollout and dpxUSD is not yet ready to be launched, we will have new temporary liquidity mining farms replacing the old ones. These farms will be revamped versions of the DPX/ETH and RDPX/ETH farms but with new reward incentives. They will remain active until dpxUSD is released in the near future.
The rewards for these pools will be as follows:
- 20 dpx a day for DPX/ETH
- 15 dpx a day for rDPX/ETH
We aim to have a smooth transition, for this reason, we decided to do a phased roll-out with additional utility added as more products are released.
For the moment, at launch, veDPX stakers will be able to:
- Receive yield from protocol fees and from $DPX rewards
Shortly after, other utilities will be slowly rolled-out, including (In no specific order):
- Voting on governance proposals
- Voting on Interest Rate Options strikes
- Voting on Gauge weights to decide on emissions
- Voting on strikes for put pools
- Voting on strikes for call pools
- Deciding on future incentives for all our products
- Deciding on new SSOV vaults
- Deciding on new IRO vaults
- Deciding rDPX V2 Parameters
- Choosing Y/N Vaults
- Holders with >1k veDPX (1k dpx staked for 4 years) can arbitrage the dpxUSD poolAnd more to come.
Out of the impressive Dopex release lineup, the most significant one for Plutus is without a doubt veDPX. With the introduction and release of veDPX, the Plutus vision begins to truly materialize. Plutus’ value proposition for users is simple yet profound - maximum rewards with maximum liquidity. Plutus’ objective is to be the premier Layer 2 governance blackhole, with that governance power accruing to the $PLS token. If you’re just catching up or want a refresher on why aggregating governance is valuable, we highly recommend you read this article. So far Plutus has locked away nearly 5% of $DPXs circulating supply.
Plutus enables users to make the most out of their DPX - essentially offering maximum rewards with maximum liquidity. Through minting plsDPX with DPX and staking it in Plutus, users receive multiple layers of yield - max-locked veDPX rewards, $PLS emissions and productive treasury yield. In addition, users have access to liquidity through our plsDPX-DPX pool, which is going live soon. To summarize, plsDPX can be characterized as a supercharged liquid staking derivative of max-locked veDPX with additional layers of yield.
If you’re looking to get the most out of your DPX without having to lock, you can already mint and stake your plsDPX at https://plutusdao.io/ and begin receiving rewards. Pending final testing, the Plutus team is looking to convert all underlying DPX into veDPX as soon as possible. As usual, security of user funds and quality products comes first.
The Plutus team congratulates the Dopex team on the successful veDPX release - we’re excited to be building the on-chain options ecosystem together!
veDPX is a massive step towards our end goal of becoming a fully permissionless options protocol. This was all made possible by the culmination of a year of hard work by our developers, designers, and other miscellaneous internsThe team is working tirelessly and fully committed to bringing Dopex to its next phase of evolution.
With the so-called bear market at our backs, we are still in a very solid financial and structural position. With this said, we are well-positioned to push through any market and set to be close to impossible to fail.
Parting words from the CEO himself
If you have any other questions you can always hop onto our Discord and one of our team members or community can help you further: Discord.gg/dopex
Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers — all in a passive manner. Dopex uses option pools to allow anyone to earn a yield passively. Offering value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expiries. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.
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