ve(3,3) EYWA flywheel or a new way for EYWA DAO participants to earn through incentives

With the launch of the new incentives functionality, not only does a new income mechanism become available, but the ve(3,3) EYWA ecosystem flywheel is also set in motion.

«ve(3,3)» is a mechanism used in DeFi protocols that combines (3,3) from game theory (mutually beneficial cooperation) and ve (vote escrow, i.e., token locking for voting), creating a tokenomics model where everyone benefits from acting in the protocol’s best interests, generating overall synergy.

Now, owners of locked EYWA tokens (veEYWA) can receive additional rewards for participating in votes for specific liquidity pools, significantly expanding the earning opportunities within the ecosystem. Meanwhile, external projects can acquire liquidity, gain visibility, and secure their status in the cross-chain space.

1. Launch of a new way of earning for EYWA DAO participants

Previously, participants in the EYWA ecosystem earned from staking, providing liquidity, bonding, arbitrage, and other activities.

Now, the new mechanism allows external projects to offer rewards to DAO participants for supporting certain pools. These rewards are called incentives.

What are incentives?

Incentives are rewards offered by external projects to EYWA DAO participants who vote for specific liquidity pools. Essentially, incentives function as stimuli, transforming the voting process into an additional sources of income for veEYWA holders.

This approach resembles the concept of “bribes” in the CURVE ecosystem, where rewards encourage active participation and help direct liquidity where it’s needed.

2. Conditions for earning income

• A veEYWA holder earns income if they vote for a pool that has incentives.
• The reward calculation is based on the total number of votes for the pool, the relative contribution of the participant, and the amount of allocated rewards.
• Voting incentives are distributed at the epoch change, when the system recalculates and allocates rewards.
• To simplify participation and maximize returns, the voting process can be delegated.

On the page app.crosscurve.fi/vote-pools, users can easily find the desired pool to vote for thanks to an intuitive interface with convenient filters, and get complete information about the current incentives and expected returns.

On the page app.crosscurve.fi/dashboard in the “DAO Rewards” section, users can see the incentives they have earned and make a claim.

3. Why external projects provide incentives

External projects are willing to “pay” veEYWA holders to win their votes and thus gain greater weight in the distribution of EYWA rewards.

The more votes a particular pool receives relative to others, the more EYWA the liquidity providers of that pool ultimately receive.

This helps projects attract additional liquidity, increase the yield of their pools, and strengthen their position in the EYWA ecosystem.

Attracting attention and liquidity

• If a project’s pool receives greater weight in voting, more EYWA rewards will be allocated to it, increasing the yield for liquidity providers.
• High yield leads to a rise in the TVL (total value locked) in the pool, which reinforces the stability and price resilience of the token or stablecoin the project is promoting.

Competition for limited resources

• EYWA emissions are distributed among multiple CrosCurve pools. For a project’s pool to “win”, it must offer a competitive yield. If it does not, users will choose more profitable pools.
• By using incentives, it is possible to quickly and effectively boost your own pool’s chances.

Economic benefit

• An additional influx of liquidity can be critical for projects, especially if they are launching a new token, or their pool is directly competing with popular stablecoins/other projects.
• Projects consciously invest in incentives, knowing that increased liquidity and price stability will eventually outweigh the costs.

Marketing and recognition

• Any appearance of a project among the voting and yield leaders may attract increased attention, including from users who are not veEYWA holders but are seeking high returns.

How to add incentives to a pool

On the dedicated page app.crosscurve.fi/incentivize, one can find a list of EYWA DAO pools with their main characteristics, including already contributed incentives. A project can use the filter by networks or tokens to find the desired pool and add a reward, which will be evenly distributed among everyone who voted for the pool at the start of the next epoch.

4. Projected income growth

Growth in the number of partners and new pools: as the more protocols seek to attract liquidity through EYWA Incentives, they begin to compete for veEYWA votes by offering higher incentives.

Increased demand for EYWA: in order to vote (and earn incentives), users lock more EYWA into veEYWA. This reduces the supply of EYWA on the market, which may support or drive EYWA price growth.

Higher yields for veEYWA holders: the more intense the competition, the larger the incentives offered by projects; this raises the overall yield for veEYWA holders — they earn both from staking and from additional external project incentives.

Increasing TVL and trading fees: higher rewards lead to an increase in liquidity (TVL) and trading volumes in EYWA pools. Raising commission revenue within the ecosystem. These fees are distributed among LPs and veEYWA, which also affects overall returns.

Thus, the incentive system encourages projects to work with EYWA, forming a network expansion effect: the more new pools/partners appear, the more intense the competition and the higher the potential incentives for all participants.

5. Comparison with similar solutions: Votemarket, Aerodrome/Velodrome

In the modern DeFi sector, projects use mechanisms that turn voting rights into a direct source of income.

EYWA DAO has introduced an incentives feature that allows external projects to offer rewards to participants for voting for specific liquidity pools. Essentially, this system resembles transparent “bribes” — stimuli for active participation, where all operations are automated by smart contracts and recorded on the blockchain.

Systems implementing this principle automate the process of allocating rewards through smart contracts, guaranteeing transparency and immutability of the terms.

Brief comparison:

• EYWA Incentives: provides rewards for voting within the EYWA DAO ecosystem through transparent smart contracts. Users receive extra income by participating in the distribution of liquidity. The focus is on the competitive allocation of EYWA’s limited inflation.

Analogs:

• Votemarket и Votium: focused on the Curve Finance ecosystem, where projects allocate tokens as incentives for voting for certain pools. These incentives aim to redistribute the limited supply of CRB tokens through “bribes”, creating a competitive environment among projects for liquidity pool influence.
• Aerodrome/Velodrome: integrate voting mechanisms with farming, offering bonuses for providing liquidity and for participating in governance. These solutions combine voting income with yield farming, which can lead to greater volatility.

All solutions under consideration — EYWA Incentives, Votemarket/Votium, and Aerodrome/Velodrome — use similar principles: transparency, automation through smart contracts, and economic incentives for active voting participation. Despite differences in their ecosystem focus and nuances in reward distribution, they share the common goal of motivating users to redistribute limited resources (be it EYWA or CRV tokens) and attract liquidity within their respective DeFi systems.

Conclusion

The incentives functionality in EYWA DAO is a mutually beneficial way to monetize participation in protocol governance. By turning voting rights into a direct source of income, the system not only encourages participant engagement but also brings in liquidity through external projects. A comparison with similar mechanisms on Votemarket and in the AMM-protocols Aerodrome/Velodrome shows that EYWA integrates vote governance and rewards into a single, efficient, and transparent system. This creates significant income growth potential as partnerships increase.

Such an approach opens up new opportunities for all participants in the EYWA ecosystem, providing an additional source of income and reinforcing the ve(3.3) tokenomics network effect, which will drive growth in both the earnings of veEYWA holders and the entire platform overall.

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