veVKA

veVKA, or vote-escrowed VKA, is the new standard for $VKA. By using veVKA, VKA holders can unlock a range of valuable features that enhance the tokenโ€™s utility.

To acquire veVKA, users lock their VKA tokens for a specific period. The value of veVKA is proportional to the amount of VKA staked and the lock duration, with a maximum lock period of 2 years. Each wallet is associated with a single veVKA expiry date.

Over time, the value of veVKA gradually decreases until it reaches zero at the end of the lock period, at which point the staked VKA tokens are unlocked.

Whenever you lock $VKA, the lock expiry date is updated to the latest lock period. For instance, if you locked 1 $VKA for 2 years a year ago and then lock an additional 1 $VKA now for 2 years, both will be locked for 2 more years. You can also extend your lock period or increase your staked VKA to increase the value of your veVKA.

The Benefits of Switching to veVKA

Incentives for $VKA Holders

Emissions will be dedicated only to $VKA lockers, not to both esVKA and $VKA stakers. $USDC fee shares and esVKA emissions will be directed towards Vaultkaโ€™s true long-term supporters who forfeit selling rights and lock their tokens. This will ensure healthier growth and stability for Vaultka.

Better Alignment with Strategies and Tokens

esVKA emission boosts for vaults and lending pools will be calculated based on the amount of veVKA a user holds. This aligns the incentives between $VKA and vaults, rewarding users who lock their tokens for a longer period and channeling esVKA emissions to long-term supporters.

Locking Mechanism to Reduce Supply

veVKA acts as a mechanism to reduce the overall supply of VKA tokens, mitigating the risk of users unstaking and selling their tokens freely. Fixed lock periods contribute to the stability and resilience of the protocol, ensuring the long-term health of the Vaultka ecosystem.

Unlock the Full Potential of veVKA

Reward Boosts

Reward boosts will now be calculated based on veVKA holdings instead of just $VKA stakes. veVKA holders can receive up to a 2.5x boost in LP esVKA emissions. Without a boost, the default emission rate is 1x. Users with boosted multipliers will receive a proportionally greater share of $esVKA emissions than users without veVKA.

Protocol Fee Share

veVKA holders receive 60% of protocol fees in USDC, providing tangible real-yield returns for governance participants. Additionally, veVKA holders will earn esVKA emissions. This structure is expected to translate into higher rewards for $VKA lockers, as rewards will no longer be diluted by staked esVKA, thus favoring long-term lockers.

Voting Power & Bribe Rewards

veVKA holders can vote on governance proposals and influence the distribution of emissions across vaults to boost their rewards. Bribe rewards will also be fully distributed to veVKA holders who vote on the corresponding vaults.

Transitioning to veVKA: A Step-by-Step Guide

  1. Restake Your $VKA: To receive rewards from staking $VKA, users must unstake their $VKA from the previous contract and restake it onto the new locking contract to receive veVKA. USDC and esVKA emissions will stop in the old contract once the new staking contract is deployed, and no rewards will be issued for stakes in the old contract. All rewards, along with the USDC and esVKA boost for the first two weeks, will go to the new locking contract. The transaction fees should be minimal due to the low-cost environment on Arbitrum.

  2. Vest esVKA: Users can vest their esVKA under the "Vest esVKA" tab. They can choose a vesting period and receive the corresponding amount of VKA linearly over that period. The vesting mechanism remains the same, and more details can be found in our docs.

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