Carthage Tokenomics

Tokenomics

Carthage uses two tokens to manage its utility and governance:

$CARTH — ERC-20 utility token of the protocol
$veCARTH — ERC-721 governance token in the form of an NFT (non-fungible token)

$CARTH is used for rewarding liquidity providers through emissions.

$veCARTH is used for governance. Any $CARTH holder can vote-escrow their tokens and receive a $CARTH (also known as veNFT) in exchange. Additional tokens can be added to the $veCARTH NFT at any time.

The lock period (also known as vote-escrowed period, hence the ve prefix) can be up to 4 years, following the linear relationship shown below:

100 $CARTH locked for 4 years will become 100 $veCARTH
100 $CARTH locked for 1 year will become 25 $veCARTH

The longer the vesting time, the higher the voting power (voting weight) and rewards the $veCARTH holder receives.

ve(3,3) Mechanics

Carthage mechanics reflect a combination of two DeFi concepts:

Vote-Escrow — first introduced by Curve to strengthen incentives for long-term token holders
Staking/Rebasing/Bonding or (3,3) game theory — designed by Olympus DAO

Combined, the ve(3,3) mechanism rewards behaviors correlated with Velodrome's success, such as liquidity provision and long-term token holding. Liquidity providers receive $CARTH emissions, and $veCARTH holders receive protocol fees, bribes, rebases, and governance power.

Below, we will walk through the components of the mechanism in order to explain how it helps the incentives flow to the most valuable of the ecosystem liquidity pools.

Initial Distribution

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Distribution

Community

Protocols

Grants

Team

Genesis Liquidity Pools

Emissions

The initial supply of $CARTH is 30M.

Weekly emissions start at TBD $CARTH (TBD% of the initial supply) and decay at TBD% per week (epoch).

$veCARTH holders receive a rebase proportional to epoch LP emissions and the ratio of $veCARTH to $CART supply, thus reducing vote power dilution for $veCARTH!

The weekly rebase amount is calculated with the following formula:

(veCARTH.totalSupply ÷ CARTH.totalsupply)³ × 0.5 × Emissions

$veCARTH supply does not affect weekly LP emissions.

Emission Schedule

Gauge Voting

$veCARTH holders decide which liquidity pools receive emissions in a given epoch by voting on their preferred liquidity pool gauges. $CARTH emissions will be distributed proportionally to the total votes a liquidity pool receives.

In return, voters receive 100% of the trading fees and bribes collected through the liquidity pool they vote for.

Voting for gauges, or in fact any action related to the $veCARTH NFT is allowed only once per epoch. This means that calling Voter.reset() (used for resetting an NFT vote state and usually required before merging it into another $veVELO NFT) or Voter.poke() (used to re-cast the votes for the current epoch in order to direct emissions and earn bribes) counts as an action for the current epoch.

While limiting the protocol participants to one action per epoch is not ideal, it does make the protocol safer against potential exploitative behaviour.

💡

Unused $veVELO voting power is still taken into account as we calculate the weight of the vote upon epoch flip and based on the locked vesting slope.

Please make sure you always cast 100% of your voting power to avoid unexpected outcomes!

Rewards

There are 4 types of rewards on Carthage.

Emissions

Represent $CARTH distributed to liquidity pool stakers. The amount of $CARTH distributed towards every pool is proportional to the voting power received from the voters every epoch.

These rewards are streaming and are available for claim as these accrue.

Fees

Represent liquidity pool trading fees distributed to voters in pool tokens ( e.g., if the pool is vAMM-CARTH/USDC the distributed tokens are $CARTH and $USDC).

The tokens are streaming proportionally to the voting power cast by a voter and the accrued amount of trading fees.

These rewards are available for claim as they accrue. They do not need to be claimed each epoch.

Bribes

In addition to the fees, liquidity pools allow external rewards from anyone (known as bribes). Bribes can be added to whitelisted pools and are distributed only to voters on that pool, proportionally to their share of pool votes.

These rewards are available for claim after the epoch flips (after Wednesday 23:59 UTC), and are proportional to the voting power cast by a voter ($veCARTH).

Rebases

Represent $veCARTH distributed to $veCARTH holders in order to reduce the voting power dilution.

These rewards are available for claim as these accrue and are streaming proportionally to all $veCARTH holders.

Rewards claim

Rebase rewards claim is available one full epoch after tokens are locked. External bribe rewards are claimable after a new epoch has started (epochs increment right after 23:59 UTC each Wednesday).

An example of bribes, voting, and rewards claim timeline:

A new epoch starts Thursday (00:00 UTC)
Bribes are deposited at any point in the epoch
Voters vote for their preferred pools
Once the next epoch arrives (the following Thursday), users are able to claim rewards from the UI or the corresponding WrappedExternalBribe contract

Whitelisting

While Velodrome supports permissionless liquidity pool and gauge creation, these can only include whitelisted tokens. The protocol will launch with an extensive list of pre-whitelisted tokens, including those from partner protocols.

Partners can request additional tokens to be whitelisted.

A permissionless whitelisting on-chain governance process will be implemented in the future, pending required on-chain governance infrastructure on Optimism.

Commissaire

Requirements for whitelisting are critical to ensuring that the protocol cannot be exploited by actors attempting to game emissions.

To support the health of the protocol and ecosystem, the Commissaire (a Curve-esque Emergency DAO) will have the right to disable hostile gauges.

The Commissaire will initially consist of seven members from the Carthage team and prominent figures from within the Scroll community.