Balancer has made a big change to their tokenomics – the BAL token is implementing its new veBAL system based on the veCRV model!
Why is this important for APY.Vision LP’s?
This has major implications for LP’s currently earning BAL tokens in the VISION/ETH 80/20 pool on Balancer Polygon. In the near future, veBAL tokens will be used to vote on which liquidity pools receive BAL incentives. This implies that as a VISION/ETH LP it may be advisable to convert your BAL rewards into veBAL to have the ability to vote for continued incentives on the VISION/ETH pool.
How the veBAL system works
Important note: veBAL can only be used on ETH mainnet. You can still earn BAL rewards on Polygon or Arbitrum but the tokens must be bridged to ETH mainnet in order to vote.
Voting is now live! Liquidity mining emissions as directed by veBAL holders start on 7 April 2022 at 0:00 UTC. A vote will persist until it is changed. Editing can only be done once in 10 days.
The way veBAL works is by adding a new mechanism to lock BAL/WETH 80/20 BPT tokens which are then converted to veBAL tokens. These new tokens are used for governance of the protocol. The longer the length of the time lock a user agrees to the higher their multiplier of governance. Incentives are in place to encourage locking.
- Lockers receive 75% of protocol fees.
- veBAL will also be used for a governance gauge voting mechanism to decide which pools receive $BAL liquidity mining incentives.
- Bribing battles will allow projects to provide veBAL holders a compensation or reward to vote in a direction they prefer
- Locking the same amount of BPT for a longer period will yield a higher reward
Some additional changes that have been introduced to the Balancer tokenomics are centered around the token emission schedule. The new inflation schedule will be a halving of the inflation rate every 4 years and the total supply of BAL will be capped at 94,000,000.
We are happy to be working tightly with the Balancer team on various projects and are excited to see them implement their new tokenomics model. APY.vision plans to be a part of the veBAL community and participate in governance and we encourage our users to join along in the process.
APY.Vision does not give investment advice and always insists that you do your own research. Read our full Legal Disclaimer.
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