Technical Definition
ve-Tokenomics
A model where holders lock tokens for a fixed period in exchange for boosted voting power and rewards, with longer locks earning more.
By Crypto University Editorial
Governance Token · Token Emissions · DAO (Decentralized Autonomous Organization) · Liquidity Pool · Governance Risk
✦ Key Insight
It changes both the supply picture and the power structure — locked tokens cannot be sold, and voting power concentrates among those willing to lock longest.
✕ Common Misconceptions
Underestimating the illiquidity. Locked tokens cannot be sold during a drawdown, and secondary markets for locked positions are often thin or non-existent.
Detailed Explanation
Vote-escrowed designs reward commitment. Locking tokens produces a non-transferable balance that decays as the lock approaches expiry, so influence must be continually renewed. The goal is to reduce circulating supply and align voters with the protocol's long-term health.
In Practice
“A holder locks tokens for the maximum term to maximise voting weight, then directs emissions toward a pool they have supplied liquidity to.”