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.