Comparison and current status of 5 VE(3,3) projects: Velodrome, Equalizer, Thena, etc.

Original Title: "Comparison and Current Situation of 5 ve(3,3) Projects: Velodrome, Equalizer, Thena's Revenue is Relatively Healthy, Solidlizard and Solidly v2 Mainly Come from Token Subsidies"

Original Author: Jiang Haibo, PANews

The VE(3,3) project has achieved better results in the recent rebound market. Among the projects that forked from Solidly, including Velodrome on Optimism, Thena on BNB Chain, Solidlizard on Arbitrum, Solidly v2 on Ethereum, and Equalizer on Fantom, most of them have seen liquidity growth of over 100% in the past month and have become one of the top DEXs on their respective chains. PANews attempted to compare the data of these projects and analyze the problems they encountered during their development.

ve(3,3) Flywheel

ve(3,3) changed the original profit distribution method of DEX: liquidity providers (LP) no longer receive a share of transaction fees, which are all compensated through the issuance of Token ; Token stakers gain governance rights to decide the release of Token , receive all transaction fees and bribe rewards, and reduce the dilution of their own weight through rebase. Other projects no longer directly reward LP with liquidity mining rewards, but instead give them to veToken holders. By bribing veToken holders to vote for their own projects, and benefiting from higher capital efficiency, project parties only need to pay relatively small costs to obtain more DEX Token incentives and liquidity.

Here are a few key points:

During startup, the locked veToken needs to be allocated to the cooperating project in order to obtain sustained support from other projects.

Token Will continue to be issued, and project parties who receive allocations in the launch have the incentive to purchase a small amount of Token or pay a small bribe to obtain sufficient liquidity.

There is a need for new projects to join (such as Frax and Lido in LSD recently), which either require a one-time purchase of tokens for staking or continuous payment of bribes.

Ultimately, there should be a relatively stable relationship between the value released by Token and the amount of liquidity it can attract in terms of price.

The project party uses such projects to bribe and obtain liquidity at a lower cost - new projects enter, providing more income for veToken holders - higher income incentives more token locking - veToken voters vote for high-yield liquidity pools - newly issued tokens flow into these liquidity pools, attracting more liquidity - higher liquidity brings more trading volume and fee income, forming a flywheel.

During this rebound market, the performance of ve(3,3) DEX is generally better than other DEX in the same category. Below we will analyze the recent data of each project.

For detailed mechanism, please refer to our previous article: "Velodrome's TVL Alchemy: ve(3,3) mechanism, veVELO distribution and bribery situation".

Velodrome

Velodrome is currently in Epoch 39 (each week since launch is an Epoch) and appears to have developed into the liquidity hub for Optimism, with a liquidity of $284 million, a 125% increase in the past month.

At launch, Velodrome allocated locked veVELO to projects in the ecosystem, including the Optimism team. There are multiple OP-related trading pairs available for liquidity mining on Velodrome. Velodrome also received OP Tokens from Optimism for ecosystem incentives, which were distributed to veVELO holders to incentivize long-term staking.

According to official statistics from Velodrome, projects such as Optimism, Lido, Frax, Rocket Pool, Synthetix, Maker, Hop, Alchemix, Angle, etc. are all using Velodrome for liquidity incentives. Either buy and stake VELO Token, or bribe weekly.

According to the dashboard compiled by Dune Analytics @0xkhmer, the current circulating amount of VELO is 170 million, with 683 million VELO staked and a staking rate of 80.01%. The average lock-up period is 3.66 years. Velodrome's development is very healthy, with almost all newly issued tokens being used for staking. However, with the recent rapid rise in VELO token price, the growth of veVELO has slowed down, and the VELO derivatives issued by liquidity wrappers Beefy and OpenX have both experienced significant negative premiums. The growth of VELO staked in Beefy has also almost stagnated.

In the past few Epochs, the bribery and transaction fees (with a fee ratio of 0.02-0.05%) of veVELO have continuously broken historical records, reaching $760,000 in the previous Epoch. However, as the VELO price rises faster, the yield of stakers' votes continues to decline. The average APR of veVELO in the previous Epoch was 54.97%, with the main bribery APR at 35.66%, Rebase APR at 16.27%, and fee APR at 3.04%. The fee and bribery income belong to "real income", and the sum of these APRs is 38.6%, which is still relatively high compared to other projects.

Thena

Thena is currently in Epoch 7 stage, with a TVL of 147 million US dollars, an increase of 27.59% in the past 30 days. In the DEX of BNB chain, Thena's liquidity is second only to PancakeSwap and BiSwap, and relevant tweets have also been retweeted by CZ.

Thena airdropped veTHE tokens at launch, similar to 19 other projects including Frax, Ankr, LiquidDriver, pStake, DAO Maker, DEUS, and Inverse.

In Epoch6 that has ended, a total of 52 liquidity pools participated in bribery, with a total bribery amount of $277,556.

According to the official website, in the current Epoch7 phase, tokens such as LQDR from Liquid Driver, ETS Alpha, USD+ from Overnight, IPAD from Infinity PAD, NFTB, and DAO from DAO Maker are offering bribes using their native tokens. There has been no evidence of bribes being made using THE token among the first few bribe givers, and there are many projects and funds involved, indicating that these external funds can bring real income to veTHE holders. The average APR for voting on the official website is 36.95%.

According to the official website data, the circulation of Thena native Token THE is 10.21 million, the staking amount is 27.76 million, and the staking rate is 73.11%, which is relatively healthy.

Solidlizard

Solidlizard is currently in Epoch 5 stage, thanks to the rapid development of the Arbitrum ecosystem, SolidLizard's TVL is $114 million, with a growth of 196% in the past week.

Solidlizard's launch seemed quite rushed, with the distribution of its tokens being announced on the official Medium page only on January 29th. Starting from Epoch1, the team allocated 75% of the votes to the SLIZ/ETH trading pair, which highlighted the high APR incentive for staking SLIZ and boosted its price, as well as driving up TVL.

Before the launch, there was no collaboration between Solidlizard and other projects, so the initial release of SLIZ was very beneficial for SLIZ-related trading pairs. After that, Solidzard gradually collaborated with projects such as fBOMB and GMD, providing liquidity incentives for these projects.

Currently, the majority of veSLIZ voting rights are still concentrated in the hands of the team. According to the dashboard compiled by Dune Analytics @uwusanauwu, the address of the contract deployer holds 61.6% of veSLIZ, and the partner reserve still has 11.5% of veSLIZ. Among recognizable projects, only fBOMB holds 2.4% of veSLIZ.

In the completed Epoch4, veSLIZ received a total of $58,640 in bribe rewards (which may include transaction fees); in the current Epoch5, there is a bribe of $60,818, mainly given to the SLIZ-WETH trading pair. In addition to the few trading pairs set by the project party, the official website shows that there are bribe-related trading pairs for fBOMB, LDO, GMX, RNDT, and GRAIL, but the main bribes come from SLIZ Token. Rewards other than SLIZ may also come from transaction fees.

As it stands, the vast majority of voting rights are controlled by the team. If voting rights are not initially allocated to other projects, these projects may not have the incentive to continue collecting the SLIZ tokens that are issued. As a result, the staking rate of SLIZ has decreased from the initial 59.8% to the current 48.9%.

In other projects, LP does not have the motivation to stake Token. However, in Solidlizard, LP holding veSLIZ can accelerate mining. But currently, there are not many people staking SLIZ Token, and the staking rate continues to decline. The pattern of ve(3,3) has not yet formed.

Solidly v2

Solidly v2 is currently in Epoch8 stage, with a TVL of $88.77 million, up 112% in the past month.

Although the TVL of Solidly v2 is not bad, other data seems to be less than ideal. This can be seen from the Bribe page and the Vote APR chart below, where almost no one is bribing in Solidly. Voters receive real returns of only transaction fee APRs that are usually less than 5%.

The TVL of the stablecoin trading pair USDC/USDT in Solidly v2 is as high as $68 million, accounting for 76.6% of the total liquidity, and 54% of the voting power is directed towards the USDC/USDT trading pair. The strategy of Solidly v2 seems to be to offer a higher APR for the SOLID/WETH trading pair while attracting stablecoin liquidity from platforms such as Curve with a relatively higher APR, maintaining a higher valuation with a higher TVL.

Dune's data shows that the circulation of SOLID experienced a significant decline during Epoch5, but is now steadily increasing. Overall, there are almost no projects engaging in bribery in Solidly v2, and it may be difficult to accumulate voting rights through competition. This could potentially lead to pressure in the future.

Equalizer

Equalizer is currently in the Epoch14 stage, with a TVL of $45.65 million and a growth of 138% in the past month, making it the third largest DEX on Fantom.

The transaction fee for Equalizer is 0.02% for stablecoin trading pairs and 0.2% for non-stablecoin trading pairs. The daily transaction fees can generate approximately $10,000 in income for veEQUAL holders. The FTM/USDC trading pair has the highest transaction fee.

From the official voting page, it can be seen that among the trading pairs with the highest fees and bribes, the transaction fees account for about 70% of the total income from fees and bribes. Moreover, the APR for voting is relatively high, such as the bribe+fee for the FTM/USDC trading pair being $57,345 with a voting APR of 85.15%. This indicates that Equalizer's voting income mainly comes from real transaction fees, and the voting APR is relatively high.

According to data on Dune, the current circulating supply of EQUAL is 1.37 million, of which 420,000 are not staked and 950,000 are staked, with a staking rate of 69.24%. The staking rate has been decreasing recently.

Summary

Velodrome has the longest online time, with enough projects to bribe, high pledge rate, and long lock-up time. However, after the recent rapid rise in VELO price, the voting yield has continued to decline.

The main income of voters in Equalizer comes from transaction fees, accounting for about 70% of the total, and in this case, voters can usually get an APR of 80%. With high transaction fee income and high capital efficiency, this mechanism is likely to be sustainable.

Thena has attracted a large number of projects during its launch, and now there are many projects in the ecosystem that use their own issued Tokens for bribery, which is relatively healthy.

Solidlizard has a short online time, but has also gained over $100 million in liquidity due to the rapid development of the Arbitrum ecosystem. However, the main income for voters currently consists of SLIZ and a small amount of fees.

Solidly v2 seems to mainly focus on attracting liquidity for stablecoins, while offering high yield for its own token trading pairs. However, it doesn't provide much help for the long-term development of the project.

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