Tokenomics

A Token Generation Event (TGE) is planned for Q4 2024. The community token, VLD, can be staked for a specified period to obtain Vote Escrowed Tokens (veVLD). veVLD serves as voting rights, allowing holders to vote on liquidity management of elSOL and VLD token LP pools, as well as on the delegation of SOL staking within elSOL pools.

Community Token - VLD

The community token is VLD. Of the total supply, 15% will be airdropped, and the remaining 85% will be mined over eight years, primarily as incentives for elSOL holders. VLD tokens are designed to support the long-term prosperity and sustainable innovation of Solana.

VLD Airdrop (15% of Total Token Supply)

VLD will be airdropped to the following contributors who have supported "solv" and "Validators Solutions" from the early stages. 90% of the airdropped tokens will go to these contributors, while the remaining 10% will be allocated to liquidity pools.

• Open-source "solv" contributors
• $elSOL holders
• Validators Solutions Validators
• Validators Solutions points holders
• $EPCT holders (excluding core team and large holding addresses)
• Buidlers Collective NFT holders
• Epics Beta tester ticket NFT holders
• Buidlers Guild card pack NFT holders

VLD Mining (85% of Total Token Supply)

85% of VLD tokens will be mined as incentives for elSOL holders. By holding elSOL long-term, users can continuously mine VLD tokens, supporting Solana’s sustained growth. This mining period is planned for eight years.

• 80%: Mining as incentives for holding elSOL
• 10%: Liquidity provision to LPs (determined by veVLD voting)
• 10%: Set aside for DAO operations, bug bounties for open-source software "solv," and stored in the Validators DAO treasury

Vote Escrowed Token - veVLD

What is a Vote Escrowed Token (veToken)?

A Vote Escrowed Token (veToken) is a special token obtained by locking tokens for a certain period. The primary purpose of veToken is to provide incentives for users to commit to the project long-term. This promotes the sustainable development of the project, encouraging participation from a long-term perspective rather than short-term profit-seeking.

Reference (CoinGecko: What are veTokens and Understanding veTokenomics): https://www.coingecko.com/learn/vetokens-and-vetokenomics

veTokens are generated based on the duration of the token lock by the holder. The longer the lock period, the more veTokens are generated, and the greater the influence on the project. As the lock period progresses, the number of veTokens decreases, but locking the tokens again can acquire new veTokens. This provides users with incentives to remain engaged with the project continuously.

Features of veTokens

1. Rewards Based on Lock Period: Users can acquire veVLD by locking their VLD tokens for a specified period. The longer the lock period, the more veVLD is obtained, increasing users' voting rights. As the lock period progresses, veVLD decreases, but users can lock their tokens again to acquire new veVLD, recovering or increasing their voting rights.
2. Function as Voting Rights: veVLD serves as voting rights within the project. This allows users to participate in voting on elSOL pool staking delegation decisions and the selection of liquidity providers for elSOL and VLD. The more veVLD a user holds, the more influence they have in voting.
3. Fair and Sustainable Governance: The veToken mechanism is designed to ensure fair and sustainable governance in DAOs and community-driven projects. By giving more voting rights to users who contribute to the project's success over a long period, rather than pursuing short-term gains, the overall benefit of the community is maximized.
4. Enhanced Incentives: veVLD functions as an incentive to promote long-term participation in the DAO. By locking VLD tokens for a more extended period, users can acquire more veVLD and play a vital role in project decision-making. This strengthens DAO governance and enhances the project's long-term stability.

Role of veVLD

veVLD plays a crucial role in the governance of Validators DAO. Specifically, by holding veVLD, users can participate in important decisions through the Validators DAO dApp (planned for release in Q4 2024).

• Decision on elSOL Pool Staking Delegation: Users holding veVLD can participate in voting to decide on the delegation destinations for SOL staking in the elSOL pool. This allows users to select trusted validators that support network security and decentralization.
• Selection of Liquidity Providers: veVLD is also used in voting to select liquidity providers for elSOL and VLD tokens. Through voting, users influence the selection of liquidity pools, playing a role in maintaining token liquidity and market health.
• Governance and Project Decision-Making: veVLD is used in significant governance decisions within the DAO. This includes funding allocation, project direction, and partnership approvals, allowing community participants to directly contribute to shaping the project’s future.

Fair and Sustainable DAO Governance

veVLD is an essential element in ensuring fair and sustainable DAO governance. Introducing veVLD is expected to yield the following effects:

• Promotion of Long-Term Commitment: By locking VLD tokens for an extended period, users can acquire more veVLD. This favors users committed to the project’s long-term success over short-term profits.
• Allocation of Voting Rights Based on Contribution: veVLD allocates voting rights according to users' contributions. This allows for the opinions of users seriously engaged with the project to be more easily reflected, achieving healthier and more democratic governance.
• Sustainable Governance: The veVLD mechanism serves as the foundation for the long-term operation of the DAO. Since voting rights are distributed based on long-term commitment, it suppresses short-term speculative behavior and supports the sustainable development of the project.

Details on the TGE schedule, token allocation, mining schedule, and various snapshots will be announced in the forthcoming white paper.