ve(3,3) and liquidity incentives

Who decides which pools receive BIBO?

People who lock BIBO decide where the protocol should encourage liquidity. Locking gives them voting weight, which they assign to eligible pools. Each pool's share of the total votes determines its share of a common BIBO reward budget, before the fee-based limit is applied.

The roles are complementary: eligible LPs earn the incentives released to their pool, while voters receive the associated fee and external voting-incentive streams. An LP can lock earned BIBO to participate in future votes, extending a liquidity position into a longer-term role in the protocol.

The ve in ve(3,3) refers to vote escrow: committing BIBO to a lock in exchange for voting influence. This page describes that protocol model. The current release does not include the ve(3,3) mechanism or an issued BIBO platform token. BIBO locking, voting and vote-directed liquidity rewards are not available in this edition.

A commitment with voting weight

Voting weight reflects the amount of BIBO locked and the remaining lock duration. For a time-decaying lock, influence falls as its expiry approaches. A position maintained at the maximum horizon preserves the weight associated with its locked amount.

Voting expresses where participants want incentives to attract capital. Projects or other participants can also offer external voting incentives to compete for that support. These incentives supplement the fee stream associated with the chosen pool.

Market creation and incentive admission

Access to the fee-referenced emission program requires admission through governance-controlled token whitelisting and approved market routes. A new token, a newly created pool or a completed graduation does not automatically qualify.

Admission determines which markets may participate. It places a selection step between creating a market and earning activity-based emissions, helping limit reward farming through self-created, wash-traded venues. Admitted pools still need votes and eligible fee activity to support an allocation.

Votes and fees both constrain rewards

Two limits apply to an admitted pool. Votes determine its share of the BIBO budget. Trading activity supports an allowance worth up to five times the eligible fees measured in the previous window. The protocol's reference price converts that fee allowance into BIBO. The pool can receive no more than the smaller of these amounts. This maximum is its emission ceiling; the actual release may be lower.

For example, 10 WETH of eligible fees supports an allowance worth up to 50 WETH at the reference valuation. If votes assign the pool a budget worth 30 WETH, its ceiling is 30 WETH. If that voting allocation rises to 70 WETH, the fee allowance limits the ceiling to 50 WETH. The comparison concerns pool-level incentive capacity, not an individual LP's return.

Eligible fees are paid through the voter fee stream and also provide the measurement used by this rule. The BIBO emission budget comes from the issuance schedule. Measuring fees to limit rewards does not redirect those same fees away from voters.

How the loop develops

Incentives can attract useful LP capital. Deeper liquidity can improve trade execution and support more activity. That activity generates fees, strengthening the income associated with a pool's votes and its capacity for future incentives. Votes then direct the next allocation of rewards toward the pools participants choose to support.

The two limits keep the loop grounded. A pool with strong voting demand but little eligible activity remains fee-constrained. A pool with substantial fees but few votes remains vote-constrained. The flywheel depends on useful trading and capital participation, rather than assuming that an emission allocation will create demand by itself.