Governance
Last updated
Last updated
Governance is split in Locking and Voting
The Elektrik protocol introduces a vote-escrow mechanism that encourages users to lock their tokens for extended periods in exchange for increased voting power and rewards. This system is designed to promote long-term engagement with the protocol, enhance token stability, and support the liquidity of the network.
When users choose to lock their $ELTK tokens, they receive $veELTK tokens in return. The amount of $veELTK awarded depends on the duration of the lock period, with a maximum lock duration of up to 4 years. The longer a user locks their tokens, the more $veELTK they receive, thereby incentivizing a deeper commitment to the protocol. This approach not only rewards users for their patience but also discourages rapid sell-offs, contributing to the overall stability of the $ELTK token.
The $veELTK tokens serve a dual purpose: they represent the user’s voting power within the Elektrik protocol and determine their influence over key governance decisions, specifically the distribution of $ELTK emissions across various liquidity pools. During each weekly epoch, $veELTK holders can vote on how the $ELTK emissions should be allocated to different pools. The amount of $ELTK a particular pool receives is proportional to the number of votes it attracts. Once a vote is cast in an epoch, it cannot be changed until the next epoch, adding a layer of strategic planning to the voting process.
Active participation in this governance process is further incentivized by rewarding voters with a share of the trading fees generated by the pools they support. Specifically, 40% of the trading fees collected from a pool go to the voters who chose that pool, while 50% is distributed to the liquidity providers (LPs) in the pool, and the remaining 10% is allocated to the Elektrik protocol itself. This incentive structure not only motivates users to engage in the governance of the protocol but also encourages them to promote and select pools that are likely to generate high trading volumes.
The vote-escrow mechanism also plays a crucial role in enhancing the attractiveness and depth of the liquidity pools within the Elektrik protocol. By influencing the distribution of $ELTK emissions, $veELTK holders can direct more rewards to specific pools, thereby attracting more liquidity. This increased liquidity results in deeper pools and reduced trade slippage, benefiting all participants in the protocol.
1.1 How to Lock Tokens
Step-by-Step Guide:
Navigate to the Locking Section: Access the ELTK Locking page from the main dashboard.
Select Lock Amount: Enter the amount of ELTK you wish to lock. You can use the percentage buttons (25%, 50%, 75%, Max) to quickly select a portion of your wallet balance.
Choose Lock Duration: Select the duration for which you want to lock your tokens. Longer durations provide greater voting power.
Confirm Details: Review the lock overview to see the voting power increase and the expiry date.
Execute Lock: Click on the 'Lock' button to initiate the lock. You may need to approve the transaction in your connected wallet.
1.2 Key Features:
Variable Lock Durations: Choose from durations ranging from 1 week to 4 years.
Voting Power Increase: Longer durations yield more voting power, enhancing your influence in governance votes.
1.3 Features and Benefits:
Flexible Durations: Options range from weeks to years for locking periods.
Enhanced Voting Power: The longer the lock, the greater your influence in votes.
Security and Transparency: Track all locking activities directly on the blockchain.
2.1 How to Vote
Step-by-Step Guide:
Access Governance Section: Go to the Governance tab on the main menu.
Review Proposals: Browse active proposals you can participate in. Proposals are detailed with title, current voting status, and time remaining.
Select Proposal: Click on a proposal to view more details.
Cast Your Vote: Use the 'Yes' or 'No' buttons to vote on the proposal. Your available voting power will be displayed.
Submit Vote: Confirm your choice by submitting the vote. You may need to confirm the transaction in your wallet.
2.2 Key Features:
Real-time Updates: Voting percentages and time remaining for each proposal are updated in real time.
Proposal Details: Detailed insights into each proposal, including proposer address, quorum required, and voting progress.
