The ubiquity of ve_3,3_: which projects are worth focusing on?

“This is a compelling DEX innovation and design that provides an incentive system superior to primitive automated market makers (AMMs) such as Uniswap and Sushiswap.”

Original title: "ve(3,3) Is Everywhere"

Written by: ADAM

Compilation: Deep Tide TechFlow

The original Solidly decentralized exchange, now colloquially known as ve(3,3), has garnered a lot of attention in the DeFi space. This is a compelling DEX innovation and design that offers an incentive system superior to primitive automated market makers (AMMs) such as Uniswap and Sushiswap. These ve(3,3) protocols require veNFT holders, partner protocols, and LPs to interact on a weekly or more frequent basis to maximize yield, liquidity, or other goals (such as attention share).

Bear market pressure and high emissions have created ongoing downward price pressure on ve(3,3) DEXs across various ecosystems. However, in the long run, I still believe that an engaged staker base and consistency across protocols will lead to a sustainable flywheel.

veNFT holders can earn over 200% bribes every week regardless of native token price, while the ve(3,3) team seeks TVL, aggregator partners, and better order execution tech to maximize trade volume and fees.

Is more ve(3, 3) DEX a bad thing?

Every new DEX seems to be a fork or overhaul of Solidly. Guru Network has built a nice comparison dashboard to keep track of the best Solidly Visions comparisons!

According to DeFi Llama, there are now 31 Solidly forks across multiple chains, with Velodrome accounting for more than 35% of the TVL.

I don't think this is a bad thing. Clearly, competition is always beneficial to market players. Best order execution gives buyers and sellers the best prices and DEX aggregators are enabling this (Firebird is my personal favorite - $FBA is a low market cap alpha). However, most forks are unsuccessful. Teams without a unified business strategy outreach and community buy-in will fail.

One of the DeFi paradigm shifts pioneered by Olympus DAO is the concept of Protocol Owned Liquidity (POL). Now, this concept has become extremely popular in new protocols because it can generate income (capital efficiency).

ve(3,3) DEX provides a huge opportunity for teams to manage POL. DEX not only distributes important veNFTs, provides voting rights for fees and emissions, but also provides customized liquidity strategies. Solidly's design space allows for modular improvements on top of basic liquidity curves and staking contracts. For example, Thena builds pooled liquidity using Gamma Strategies and Algebra to enable customized liquidity ranges and liquidity curves to maximize fees for specific asset types.

ve(3, 3) Differentiation of DEX

Building a ve(3,3) DEX requires more than secure smart contracts, effective user experience, and novel token designs. Contributing to the brand's mission/vision/values is becoming increasingly important to attract the right partners. As the number of DeFi DApp teams increases, my prediction is that teams want their POL to be managed by a ve(3,3) DEX team with consensus, an easy-to-read track record, and the ability to manage relationships consistently and thoughtfully.

I've been advising an emerging ve(3,3) DEX called Solunea. They built a working protocol on zKsync, raised some ETH for POL, and launched their SLNA token before deciding to move to Arbitrum. Arbitrum has more mature infrastructure, deeper liquidity and more DApps to work with, so this is a wise decision. Solunea is a small and humble team with a "community owned" philosophy. Community ownership means no VC investors, members of Discord generate content, partnerships and strategies, and 100% of exchange fees go to veNFT holders. It's a really cool, egalitarian project, and I recommend the team empower their community to trade with like-minded projects in the Arbitrum ecosystem.

ve(3, 3) Future of DEX

As these protocols continue to build TVL and strengthen partnerships with various teams in each ecosystem, we will see the power of modularity on top of ve(3,3) DEXs lead to higher fees and sustainability .

Here are some ideas I have for the ve(3,3) builder:

• Launchpad for new project tokens - this makes perfect sense. ve(3,3) team and NFT holders to DD/whitelist projects using DEX for IDO. POL is listed on ve(3,3) DEX, and the experience is very smooth. These DEXs will build strong network effects as they bring an informed and motivated audience of voters/investors. Fundraising via ve(3,3) would be a win-win.
• Treasury management. Many protocols manage a range of assets, and a ve(3,3) DEX can help improve this efficiency. By pooling liquidity and perpetual contracts, delta-neutral strategies can generate returns without risking impermanent losses.
• ve(3, 3) stablecoin backed by veNFT and LP tokens. Why? Because we like capital efficiency and leverage.
• veNFT AMM is used to exchange locked positions and perform liquidation. Bug Finance is building a new mechanism that allows exiting veNFT positions.

• Self-repaying loans for veNFT holders.

In conclusion, ve(3, 3) is here to stay and it's good to see many competitors in DeFi. My prediction is that as market makers reduce their CEX operations, we will see more and more large token liquidity migrating to ve(3,3) DEXs for capital efficiency. There will always be speculators moving their liquidity to the DEX that offers the best yield, however, the DEX that is the most capital efficient and able to generate the highest trading volume will benefit veNFT holders and be sustainable in the long run .

my ve(3, 3) selection

• Thena - has sustainable income from Fusion (centralized liquidity), Alpha (partnership with Deus), forks and advisors in various ecosystems, strong front-end designers, and great BD. Plus BSC is a huge ecosystem with huge potential.
• Chronos - The best DeFi ecosystem is Arbitrum, Chronos has a strong brand and team. Their maNFT and no rebase should result in consistent TVL and lock-in as long as the bribes come in.
• Velodrome - the largest DEX on Optimism is ready, and with the Optimism Bedrock upgrade looming, Coinbase's launch of Base gives Velodrome a chance to take to the skies. Velodrome V2 is coming soon and will provide a much needed upgrade to generate protocol fees.
• Solunea - a small project just launched on Arbitrum. Dynamic emissions should keep LP's APR stable (high lock-in leads to high emissions, low lock-in reduces emissions). SLNA's liquidity mining starts today: