Tokenomics & Utilities

deFarm token $DEF has several intrinsic values behind it.

deFarm Protocol uses dual tokens to manage the governance and utilities.

$DEF

First, $DEF is an ERC-20 utility token with use cases include:

Reward good actors of the protocol, while gatekeeping the bad actors outside. $DEF tokenomics was designed to incentivize the ongoing contributors who either interact or trade on the protocol, promoting the protocol or other activities that might benefits the whole protocol in general.

Staking: staking $DEF is the only way to get $veDEF.

veDEF

veDEF, or vote-escrowed DEF, is a unique element within deFarm's ecosystem, created to incentivize long-term holding and active governance participation. Unlike regular $DEF tokens, veDEF is non-transferable, meaning it can't be sold or passed on to another user. Users can only acquire veDEF by staking their $DEF tokens. The longer the staking period, the more veDEF a user receives.

Calculation

The veDEF mechanism operates on a multiplier system, where the amount of veDEF received increases with the duration of the stake. Stakeholders can accumulate veDEF over time, and the maximum veDEF a stakeholder can receive is 2.0 times the amount of $DEF staked. To reach this maximum multiplier of 2.0x, stakeholders need to maintain their staking duration for a minimum of 180 days. Here is how veDEF scales:

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Benefits

Reward from treasury

veDEF holders are to be rewarded wi 50% of the protocol fees generated by deFarm.

Incentive Program Boost

Holding veDEF in the deFarm ecosystem offers the advantage of boosting rewards from their Incentive Program. The amount of veDEF a user holds directly impacts the level of reward boost they can receive, with a maximum potential boost of up to 2.5 times the standard rewards.

Governance Voting Power

Holding veDEF provides influential governance rights within the deFarm Governance. veDEF holders possess voting power proportional to their veDEF balance, giving them a direct influence over the strategic direction of deFarm, including protocol upgrades, treasury management, and policy changes.

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Treasury and Governance⁠

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