# Tokenomics
## `$BLADE` / `$veBLADE`
BladeSwap utilizes two tokens for managing its utility and governance:
* **`$BLADE`**— ERC-20 utility and reward token of the protocol
* **`$veBLADE`** — ERC-20 governance token of the protocol
`$BLADE` is used for rewarding liquidity providers through emissions.
`$veBLADE` is used for governance. Any `$BLADE` holder can vote-escrow their tokens and receive the same number of `$veBLADE` at any time. There is no lock-up period and every `$veBLADE` token has the same voting power.
Conversion from `$BLADE` to `$veBLADE` is always possible, but it's irreversible. `$veBLADE` can be liquidated at any time through the `$BLADE`/`$veBLADE` pair on BladeSwap.
## ve(3,3) Mechanics
BladeSwap mechanics were inspired a blend of two DeFi concepts:
* **Vote-Escrow** — first introduced by Curve to bolster incentives for long-term token holders
* **Staking/Rebasing/Bonding or (3,3) game theory** — designed by Olympus DAO
BladeSwap is designed differently from the typical model known as ve(3,3), yet it inherits its spirit.
At the heart of Vote-Escrow is the virtuous cycle structure where high trading volume leads to high trading fees, high gauge votes, high rewards, and in turn, high Total Value Locked (TVL). This ensures the utility of the token and prevents distortion in the incentive structure. It's further optimized through the removal of epochs and a real-time voting mechanism.
The spirit of game theory, represented by (3,3), has been re-interpreted to give stakers the freedom to easily find the optimal balance point and act accordingly. While the structure that benefits the entire protocol when everyone stakes their rewards is maintained, the problem of liquidity difficulties faced by existing stakers and the barrier to entry for new users has been resolved. Now that `$veBLADE` has transitioned from NFT to a fungible ERC-20, it can be converted to `$BLADE` at any time according to market value.
## Distribution
Once $BLADE tokens are locked into `$veBLADE`, they are permanently removed from the circulating supply. However, unlike nearly non-tradeable NFTs, voters can exchange their tokens for `$BLADE` at market prices at any time through the liquidity pool. Ecosystem and team allocations are permanently locked as `$veBLADE`.
## Liquid Token (`$BLADE`)
* **LBP (Fjord):** 12% \
— 24M
* **Community:** 2%\
— 4M
* **Marketing:** 2%\
— 4M
* **LP:** 4%\
— 8M
LBP & LP allocations refer to the maximum amount that can be used, adjusted by the result the LBP sale. The remaining LBP and LP allocations after the launch will be burned.
## Locked Tokens (`$veBLADE`) — Permanently Locked
* **Ecosystem:** 8%\
— 16M
* **Team:** 12%\
— 24M
## Emissions
* 60% (2 year curve) \
— 120M
Weekly emissions will being at 1.2M `$BLADE` (3% of the initial `$BLADE` supply). The emission schedule will follow three phases:
**Phase 1:** During the first 14 weeks, emissions will increase at 3% per week, allowing for rapid growth in protocol activity and partner onboarding.
**Phase 3:** After 14 weeks, emissions will decay at 1% per epoch, ensuring total supply inflation decreases over time as the protocol matures.
**Phase 3:** After 98 weeks, emissions will be determined through governance vote.
### LP Emissions by Week
### Accumulated Emissions by Week
