Primer on Yield Assets & Liquidity Incentive

Curve introduced the vote escrow mechanism (ve) to power the incentive for stableswap liquidity of stablecoin pairs. The concept of ve can be applied more generally to enhance the liquidity experience where it is needed.

Typically, the following areas are identified where liquidity should be incentivized, as utilization in these cases is high:

• Stablecoin liquidity

To become a medium of exchange, the issuer of a stablecoin is incentivized to enable as much liquidity for its stablecoin with other assets and media of exchange as possible.

Example: Curve stableswap's veCVE.

• DEX Swap TVL

Asset issuers with DEX pairs for their assets need liquidity for their pairs (e.g. xxx/ETH) to optimize trading experience for their asset holders.

Example: Balancer BAL/ETH's veBAL.

• Yield trading liquidity

Yield-bearing assets such as stETH, sUSDe want to incentivize their holders to lock in their yield-bearing assets with PT-YT yield trading.

Example: Pendle's vePENDLE for PT/YT pairs.

TownSquare's ve to incentivize liquidity for leveraged yield experience

TownSquare's ve to incentivize liquidity for leveraged yield experience

veTOWN to incentivize liquidity for leveraged yield experience

TownSquare's vote escrow implementation leverages the success of all these examples to power liquidity for the underlying asset (e.g. MON, ETH) and the yield asset (e.g. aprMON, shMON, PT-aprMON & PT-stETH etc.) to enhance the leveraged yield experience for yield-bearing asset holders.