veOY (Locked OY)

veOY, short for vote-escrowed OY, is the core governance token of the OmniYield protocol. It is designed to empower and reward our most committed community members, aligning their interests with the long-term success of the platform.

By locking OY for veOY, you gain the power to shape the future of OmniYield while earning a share of its revenue.

Proven veToken Model

"Locking was a concept created to align incentives for governance. Many coin voting systems have a problem where someone can buy tokens off the market to influence a governance vote, then sell the tokens after the vote passed/failed. These users can influence governance votes greatly and only take minimal risk by holding tokens for a few days. Locking stops this happening. Users must lock their tokens for a period of time to receive voting power, and users are rewarded with more voting power if they lock their tokens for a longer period of time."

— Curve docs

Since their inception, vote-escrow tokenomics have marked a significant turning point in the decentralized finance (DeFi) sector. It enables users to lock up their tokens, and in return, they receive a share of the platform's revenue. For years now, this has been a winning formula for top projects, helping them unlock rapid growth, boost Total Value Locked (TVL), and build a strong, committed community.

We are introducing our own version, veOY, to bring these same benefits to the OmniYield ecosystem. By adopting this model, we're putting power back into the hands of our most loyal supporters and making sure that our users and the protocol grow together for the long term. It's our commitment to building a protocol where long-term vision is not only encouraged but directly rewarded.

Why Lock OY for veOY? Benefits of veOY

veOY is designed to enhance the utility of the $OY token and boost the protocol's decentralization:

Earn 50% of Protocol Revenue

As a veOY holder, you are entitled to a significant share of the platform's revenue from our fee sharing model. Here’s how it works:

• OmniYield vaults take a 9% performance fee on profits generated by users' deposits.

• 50% of the fees collected from each vault are used to purchase OY tokens on the open market.

• Every epoch, veOY holders are invited to vote on how $OY emissions are distributed among the vaults; each veOY holder can support one vault or split votes across several (1 veOY = 1 vote).

• The OY tokens purchased with fees from a particular vault are then distributed exclusively to the veOY holders who voted for that vault, in proportion to their voting weight (e.g. veOY holders who voted for Vault X will receive 50% of all revenue generated from Vault X’s fees.). In total, veOY voters collectively earn 50% of all fees generated across OmniYield.

This reward structure is crafted to promote long-term commitment, governance participation, and align token holders’ incentives with the protocol's overall success. The more fees the platform generates, the more rewards veOY holders can earn.

Direct OY Token Emissions (from Vested Ecosystem Incentives)

A fixed portion of the $OY total supply is reserved for long-term ecosystem growth. This pool is unlocked over time through vesting.

Through gauge weight voting, veOY holders decide how this vested supply is distributed across vaults - boosting APY and incentivizing liquidity in the vault(s) they vote for.

The process is as follows:

• At the start of every epoch, veOY holders participate in gauge weight voting, casting their votes to determine how OY emissions from the ecosystem incentive pool are allocated across OmniYield vaults for the upcoming epoch.

• Your veOY balance is your voting power - 1 veOY = 1 vote. You can allocate votes to direct new $OY emissions to your preferred vault(s), boosting their APY and attracting more deposits.

• Once voting concludes, a snapshot of all votes is taken. The $OY incentive rates for each vault will then be adjusted accordingly for the upcoming epoch, vaults that receive more votes get a proportionally larger share of the $OY emissions.

This process does not inflate the token supply. The total $OY supply is capped and not inflated over time. All emissions come from a fixed, pre-allocated, and vested allocation.

The core idea here is simple: The more veOY you hold, the greater your influence over the incentive distribution.

Governance Power

Your veOY balance represents your voting power in the OmniYield DAO. It gives you the ability to shape the protocol's future by proposing and voting on key decisions. All governance votes are conducted on-chain and through Snapshot, allowing the community to make critical decisions, including but not limited to:

• Directing $OY emissions: veOY gives you direct control over the distribution of $OY rewards across the various OmniYield vaults.

• Influencing protocol development: Propose and vote on major protocol upgrades, new features, new chain deployments, and strategic partnerships.

• Managing the DAO Treasury: Participate in decisions regarding the use of the DAO treasury and strategic funds.

• Steering overall strategy: Have a say in the long-term direction of OmniYield.

This democratic process not only makes governance truly decentralized but also adds fundamental utility to the OY token, giving every holder a stake in the protocol's success.

veOY Mechanism

Understanding veOY Balance and Decay

veOY is obtained by locking OY tokens and is non-transferable.

You can lock your OY for a minimum of 1 week, maximum of 2 years. The amount of veOY received is determined by how much and for how long you decide to lock your OY tokens.

OY to veOY formula:

Lock Time Option	veOY to receive
2 years	1 locked $OY = 1 veOY
1 year	1 locked $OY = 0.5 veOY
6 months	1 locked $OY = 0.25 veOY
3 months	1 locked $OY = 0.125 veOY
1 month	1 locked $OY = 0.0417 veOY
1 week	1 locked $OY = 0.0096 veOY

Equation for Yearly Calculation:

$$\text{veOY} = \frac{\text{OY} \times \text{lockTime}}{2 \text{ years}}$$

Your veOY balance is not static; it decreases linearly over the chosen lock time, eventually reaching zero at the end of the lock-up period. At that point, your original $OY tokens are unlocked and can be withdrawn.

The lockTime parameter in the equation above represents the remaining lock time, as a user's veOY balance is constantly recalculated as time passes.

E.g. If you lock 100 $OY for two years, you start with 100 veOY. After one year, you will have 50 veOY remaining.

Managing Your Lock Position

To increase your veOY value, you can choose to extend your lock and/or increase your locked amount.

Extending Your Lock

Each wallet is associated with a single veOY expiry date; you can choose to extend the duration of your current lock at any point, up to the two-year maximum.

E.g. If Alice locked 100 OY for 2 years, after 1.5 years she would only have 25 veOY left as her remaining lock time is now 0.5 year. If she extended her lock to be 2 years again after these 1.5 years, she would again have 100 veOY.

Adding More OY

At any time, you can lock additional $OY tokens. These new tokens will share the same unlock date as your original locked amount.

E.g. If Alice locked 100 OY for 2 years, but after 1 year added 200 OY to her lock, she would have 150 veOY (300 OY total locked for 1 year). This veOY would continue to decay to 0 over the next 1 year.