opxVELO (Optimism)

opxVELO token address: 0xc38464250F51123078BBd7eA574E185F6623d037

opxVELO reserve address: 0xa7ef8b87451694162374b7467d3d7e1981563513

Minting opxVELO

1 VELO will always be convertible for 1 opxVELO, regardless of either's spot market price.

opxVELO is never exchangeable for VELO except via exchange on the spot market.

The minting process is irreversible. Minting opxVELO is trustless and permissionless. Users and projects mint opxVELO to participate in the stability pool or the vote-matching program.

Mint opxVELO here: https://app.openxswap.exchange/opxveProject/#/opxveProject

The "Intrinsic" Value of a Vote-Escrow Position

Turning vote-escrow positions into NFTs was a pivotal step for the future composability of decentralized exchanges. It also created one of the first collections of NFTs with intrinsic value derived exclusively from on-chain activities (as opposed to, e.g., NFTs that represent the value of some good or service that exists off-chain). "Tokenizing the lock position ... allows locks to be traded on secondary markets, as well as to allow participants to borrow against their locks in future lending market places."

The intrinsic erc-20 value of veNFTs (viz. the value of tokens vote-escrowed in the NFT) creates a ceiling for secondary marketplaces. A discount develops reflecting the time-value associated with purchasing locked tokens. The free market determines the floor value for veNFT collections.

This development negates an important use case for the liquid wrappers found in DEX ecosystems with non-transferrable vote-escrow positions. veNFTs being transferrable makes them liquid. Also, ve(3,3) systems without LP-boosting negates the "boost socialization" use-case of liquid wrappers. For these reasons, a liquid wrapper found in a ve(3,3) system will require novel use-cases.

Tokenizing the Value of a Vote

Projects wishing to pool liquidity with opxVELO will receive 1 vote for every 1 opxVELO in a pool with their project's token. A weekly snapshot captures the total opxVELO paired with partner tokens and allocate votes from the opxVELO project's position accordingly. Functionally, buying and pooling opxVELO with a token is the same as buying a vote for that pool (subject to IL, of course).

This allows projects three ways to receive a boost in their APRs for such pools:

1. They can bribe each week, providing incentives for users to pool opxVELO with their token.

2. They can use their project's veVELO position to provide incentives for an opxVELO pairing.

3. They can bulk mint opxVELO and pool it without incentivizing it further.

This creates two unique opportunities for projects:

1. Projects are able to mint opxVELO and pool it, retaining their liquid exposure while simultaneously growing their exposure to veVELO incentives for their project's token.

2. When opxVELO is trading below a 1:1 ratio to VELO, projects can purchase opxVELO on the spot market and pool it to increase exposure to veVELO and opxVELO at a discount.

Incentives collected by each vote-matching pool are re-allocated to their respective pool weekly, returning them to the Velodrome ecosystem. Fees collected from these pools will be paired and deposited into a corresponding OpenXSwap Vault ensuring perpetual liquidity provision for opxVELO and their token that grows over time for participating projects, acting as a liquid rebase.

This means that 100% of all incentives and fees collected by the opxVELO project return to the Velodrome ecosystem either in the form of recycled incentives or deeper liquidity.

If your project is interested in this program, please open a ticket on our Discord.

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opxveVELO -> opxVELO migration guide.