Ref Tokenomics 2.0: veTokenomics on Testnet

Your LOVE gets your favourite pools boosted

Ref Finance
4 min readJul 5, 2022

Discover Ref Tokenomics 2.0

As one of the first dapps on NEAR, and a community DAO-led effort at that, Ref Finance’s mission has always been to serve the community. That is why Ref is bringing the veToken (voting escrow token) to Ref 2.0, to make sure the voice of the Refinians comes first.

Popularized by Curve, veTokenomics has tokenholder governance at its heart. In essence, you lock up your project tokens to mint veTokens, which represent your power to vote on how the protocol will distribute its incentives, proportional to how many tokens you lock up and for how long.

However, the Curve model is not without limitations. Curve has great expertise in stablecoins and pegged-asset swaps, but it lacks alignment between yield farmers and liquidity providers of its native token. This is fine when the native token has a market cap in the hundreds of millions, so that even with mercenary farmers the price will not be greatly affected.

For markets like Ref Finance, which belongs to a relatively young but fast growing ecosystem, the core proposition must be to funnel new economic growth all the while holding the price of the native token stable. Hence, it is key to strike a balance between the interests of the farmers, token holders, and liquidity providers.

In an ideal scenario, tokenholders and farmers are liquidity providers of the native token, and are governance participants. When this all coincides, everyone benefits, as there will be…

  • Deeper, stickier liquidity
  • Stronger bonding with the project in the long run
  • Optimizing incentives for token holders and farmers, thereby incentivizing real users

In tribute to Curve, but improved, Ref introduces the veLPT and LOVE to bring our DEX to the NEAR community. Your liquidity, your vote, your DEX.

veTokenomics, with LOVE

How does it work?
Provide liquidity in the $REF <> $wNEAR pool.
Lock your LP shares for a period of 1, 3, 6, or 12 months.
Receive veLPT and Love(Ref) in return.

What is the veLPT?
The veLPT is a non-transferable token which represents your voting power corresponding to your locked LP position. With the veLPT, you can vote on which farms will be allocated how much incentives. The amount of your veLPT only shows up on your Ref account balance.

What is the LOVE(REF) token?
“LOVE” stands for “Liquidity Of VEToken.” It is a fungible token that is transferable, and represents the liquidity underlying your veTokens, i.e. your locked up LP shares. While the veLPT gives you the power to vote on which farms to boost, the LOVE token allows you to access said boosted farms. If you do not want to boost your farm rewards, you can trade your LOVE so others can boost their yield. To unlock your veLPT position, you must have 1:1 veLPT and LOVE in your account.

Vote on Incentive Allocation with veLPT

Every month, veLPT holders will be able to vote on incentive allocation to different farms of Ref. That is to say, veLPT holders will determine how much of the monthly incentives will go to boost which farms.

Boost Farm Rewards with LOVE

When you lock up your LP shares to mint veLPT, you receive 1:1 LOVE tokens at the same time. The veLPT token gives you the power to vote for which farms will get boosted rewards; the LOVE token, when staked, gives you a yield multiplier in the farms elected by veLPT holders.

If your interest is only to participate in governance, you can sell your LOVE tokens to other farmers to help them boost their farm rewards.

A Win-Win for the Ecosystem

All in all, Ref’s updated tokenomics brings long term alignment across the platform and the NEAR ecosystem.

  • Better for traders: the power of the veToken incentivizes deeper, stronger liquidity
  • Better for liquidity providers: empowering LPs with governance rights
  • Better for ecosystem projects: a transparent way to build presence through an ecosystem-governed DEX
  • Better for the NEAR ecosystem: increase level of engagement in the community
  • Better for tokenholders: more utility to the $REF token, stronger bond with the growth trajectory of NEAR
  • Deeper liquidity
  • Retail participation
  • Higher price correlation with NEAR, and bond with NEAR’s growth
  • Market position and a ecosystem driven dex, and larger alignment with ecosystem project

What will happen to xRef holders?

Prior to the new tokenomics, Ref had introduced xREF, which users could mint by staking their $REF. With xREF, Ref holders were to benefit from staking rewards and participation in DAO governance. With Ref tokenomics 2.0, one may wonder how xREF and the veToken model will relate to one another. In short, the nature of the xRef token will remain the same, as a way to collect staking reward that is currently mainly subsidized by the trading revenue earned by the protocol.

Testnet Season — Mainnet is coming!

Time to have fun on the testing grounds before our mainnet launch!

Your DEX, Your Liquidity, Your Love

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Ref Finance

Ref Finance is the starting point to the NEAR Ecosystem with a leading AMM & a synchronous #DeFi Shard.