ve(3,3) is a DeFi tokenomics model that combines Curve Finance’s vote-escrow (ve) mechanism with (3,3) cooperative game theory, aiming to align liquidity providers, token holders, and protocols in a self-reinforcing system. Designed by Andre Cronje and launched with Solidly in 2022, it became the dominant DEX model on Optimism (Velodrome) and Base (Aerodrome).
Background: Two Ancestors
Vote-Escrow (Curve / veCRV)
- Earn a share of trading fees (3bps of all Curve swaps)
- Vote on which Curve pools receive CRV emissions (gauge weights)
- Are bribed by other protocols to direct emissions to their pools
The key insight: locking token supply reduces selling pressure and aligns governance power with long-term commitment.
(3,3) Game Theory
How ve(3,3) Works
Andre Cronje merged these two ideas in Solidly:
- Users lock tokens to receive veTokens (non-transferable NFTs representing locked position + voting power). Lock duration affects voting power.
- veToken holders vote each epoch (typically 1 week) on which liquidity pools receive token emissions.
- 100% of trading fees from voted-for pools go to the voters who chose that pool — not to LPs. This is a key difference from Curve, where fees are distributed to all veCRV holders equally.
- LPs earn emissions from pools they provide liquidity to — separate from fees.
- Token dilution — veToken holders who don’t re-lock/vote get diluted by new emissions. This punishes passive holding and rewards active governance.
The result: voters are incentivized to vote for pools with high fee generation (so they earn real yield), while protocols bribe voters to direct emissions to their own pools.
Key Innovations Over Curve
| Feature | Curve (veCRV) | ve(3,3) |
|---|---|---|
| Fee distribution | All veCRV holders equally | Only to voters of that pool |
| Emissions voting | All veCRV voters | Same |
| Anti-dilution | Not built in | veLockers protected from dilution |
| Rebase | None | Epoch rebase to locked token holders |
| LP incentive source | CRV emissions | Emissions from gauge votes |
The “fees go to voters of that pool” design creates a direct feedback loop: vote for high-volume pools → earn high fees → good voters are rewarded for good picks.
Major ve(3,3) Protocols
| Protocol | Chain | Notes |
|---|---|---|
| Solidly | Ethereum | Original; launched Feb 2022, quickly forked |
| Velodrome | Optimism | Most successful ve(3,3) implementation; became the dominant Optimism DEX |
| Aerodrome | Base | Velodrome fork for Base chain; TVL surpassed Velodrome within months |
| Thena | BNB Chain | ve(3,3) model on BSC |
| Equalizer | Fantom/Sonic | Solidly lineage on Fantom ecosystem |
Criticisms
- Bribe complexity — The system works best when protocols actively bribe veToken holders, adding off-chain coordination overhead via platforms like Velodrome’s own relay system.
- Reflexive during bull markets, fragile during bear — When token price rises, locking is incentivized; when price falls, the incentive to lock weakens and emissions increase sell pressure.
- Solidly’s original failure — Andre Cronje’s original Solidly launch on Ethereum mainnet was exploitative: insiders gamed the NFT snapshot for veSOLID allocation. The design itself was sound but the launch was poorly executed.
- Not truly (3,3) — The game theory framing is marketing more than rigorous mechanism design. The actual equilibrium depends heavily on external bribe market dynamics.
History
- August 2021 — Andre Cronje announces a “fair launch” DEX combining ve + (3, 3).
- February 2022 — Solidly launches on Fantom. Top-5 TVL protocols earn veSOLID NFTs. Dozens immediately fork the code.
- March 2022 — Andre Cronje announces retirement; Solidly’s governance stalls.
- June 2022 — Velodrome launches on Optimism with improved ve(3,3) design; becomes the dominant liquidity layer on OP.
- August 2023 — Aerodrome launches on Base, extending the model to Coinbase’s L2.
- 2024 — Aerodrome surpasses $500M TVL; ve(3,3) cements itself as the standard DEX model for new EVM chains.