Amplify Overview
DeFi's ve(3,3) Liquidity Marketplace
Last updated
DeFi's ve(3,3) Liquidity Marketplace
Last updated
DeFi has delivered many innovations in managing governance and incentives across blockchain DApps. One of the most significant innovations has been the vote escrow (ve) token model, first introduced by Curve Finance.
Curve Finance set the standard with its veCRV model, where users who locked their CRV tokens for longer durations gained more influence in governance decisions and DApp emissions. This model successfully aligned long-term holders and major liquidity providers (LPs) with the growth of Curve
The success of ve systems led to the rise of bribe markets. In these markets, DApps seeking to gain votes could offer incentives to veToken holders in exchange for governance support. This created a new way for veToken holders to earn additional rewards while also driving competition among DApps for governance influence. Solidly, another step in this evolution, introduced the ve(3,3) model, which incorporated veNFT gauge voting into the distribution of incentives, while rewarding the voters with trading fees. Gauge voting allowed protocols and large LPs to compete for a share of emissions based on votes from veToken holders, creating a more efficient and dynamic allocation of rewards.
While these systems have been instrumental in optimizing rewards distribution at the protocol level, a network-wide, protocol-agnostic solution has yet to emerge. Existing models remain siloed within individual ecosystems, limiting their broader impact. To fully realize the potential of efficient incentive distribution, the next evolution must transcend single-protocol governance and create a unified, competitive marketplace where incentives flow seamlessly across networks, optimizing rewards allocation on a much larger scale.
In 2024 alone, Networks spent over $30B on token incentives, yet some earned less than $1 in revenue for every $100 spent. Existing incentive models are failing to produce long-term growth or stable revenue, threatening the sustainability of Networks and their broader DeFi ecosystems.
Amplify’s liquidity marketplace directly addresses current inefficiency by creating a competitive bidding system for incentives. DApps can offer bribes—additional payments designed to influence governance votes, thereby securing a share of the Network's incentives for attracting liquidity on their DApps. This process operates as follows:
By transforming incentive distribution into a competitive, market-driven process, Amplify significantly improves capital efficiency for networks by ensures that rewards flow to where they generate the highest economic value.
