Taking @SonicLabs as an example, let's talk about the transition from vetoken to ve(3,3)

Actually, I had discussed the ve33 mechanism and the Sonic ecosystem with Zhao a long time ago, but it was only in fragments.

Coincidentally, Binance Alpha has listed many tokens from the Sonic ecosystem, so I will ride the wave and briefly discuss the evolution of DeFi economic models from the history of DeFi.

1. Vetoken was created to solve the supply and demand issues of governance tokens.

During the summer of DeFi, liquidity mining rewards helped many projects launch. As more people participated in mining, the rewards decreased, and the method of mining, withdrawing, and selling could not alleviate this. Funds in the market began to seek higher rewards or rush into yet-to-be-launched head mining, which is somewhat similar to the current meme phenomenon.

The Vetoken mechanism alleviates the "mining, withdrawing, and selling" problem by adjusting the supply and demand relationship of tokens, incentivizing users to participate in the protocol's development long-term.

Here I can't avoid mentioning the $crv that I have always held. On Curve, CRV tokens can be locked to mint veCRV, which can earn platform profits, governance power, and help LP rewards, thereby increasing user stickiness and even triggering the Curve War. In exchange for all these attributes, veCRV cannot be sold and cannot be transferred during the lock-up period.

In short, after token staking, users can gain benefits from the protocol's growth, while holders genuinely participate in governance to maximize their interests, reducing supply and demand to stabilize prices for long-term development.

So where is the problem?

Early participants gained control over governance, while as the protocol grew, the project team bought a lot of tokens to occupy voting rights, resulting in fewer tokens circulating externally, which manipulated token prices and triggered a 51% attack.

At that time, Luna only needed 200 million in funds to trigger a 51% attack, causing billions in funds within the protocol to be lost.

2. Sonic's ve(3,3) promotes market synergy through a game-theory mechanism.

The ve(3,3) mechanism was proposed by @AndreCronjeTech, who believed that the protocol's reward mechanism should balance the conflicts between holders and LPs.

In market behavior, liquidity is provided, locked, and sold, while forming market synergy through its game theory to promote long-term project development. Perhaps in the short term, malicious actions (selling) yield the greatest benefit, but in the long run, deeply participating in the protocol can create a positive feedback loop.

$s rises - LP ARP rises - TVL rises - trading fees rise - locked amount rises - circulation decreases, causing supply and demand imbalance - $s rises.

3. X33 is a more flexible ve33.

Many people believe that $shadow's x33 is just an upgraded version of ve33, but I don’t think so. In @AndreCronjeTech's early vision, the vision of ve(3,3) was very grand. Different ve(3,3) protocols often make slight modifications to their mechanisms to reduce the mismatch correction between time invested and market recognition, thus avoiding a death spiral.

Therefore, I believe that $shadow's x33 is a more flexible version of ve33 and is an attempt to realize the AC vision that fits this protocol.

Stake $SHADOW, mint $xSHADOW.

Here you can enjoy all the benefits brought by the traditional vetoken I mentioned above, but traditional vetokens become locked once staked until maturity, whereas here you are given the opportunity to surrender and lose half. Withdrawing $xSHADOW can allow you to return to the protocol token at half price.

From the user's perspective, this provides liquidity withdrawal, while from the protocol's perspective, it imposes a 50% voting power penalty on users who choose to exit early, to reduce token dilution and encourage long-term holding.

Stake $xSHADOW, mint $x33.

I prefer to define x33 pricing as 0.5-1.0 of shadow.

After liquid staking xSHADOW, you can mint $x33, whose core mechanism involves automated voting and reward collection, while not interfering with the core mechanism of xSHADOW, and obtaining the long-term staking value in coin terms. (Protocol income and voting incentive rewards will automatically yield, increasing the x33/shadow exchange ratio.)

In summary:

Stakers who stay longer in xSHADOW will earn more fees, voting incentives, user rewards, and emissions exit rewards.

$SHADOW does not require forced locking, making you bind with me long-term, but from the protocol's perspective, the big rewards will flow to long-term holders.