What is the difference between 33, reverse 33, and VE33?
Recently, projects such as Carrot, Eggs, and Golden Bull have continued to explode. Under the wealth effect of dozens of times a day, a new Ponzi mechanism has also surfaced, which is called Reverse 33.
Why can reverse 33 become popular in the currency circle overnight? What is the charm of the mechanism behind it? Before analyzing reverse 33, let’s first take a look at what 33 mechanisms are currently available in DeFi.
[3,3] Mechanism The 33 mechanism first appeared in the DeFi 2.0 protocol OlympusDAO (OHM) project. It was proposed by the founder of the team. Olympus has a fascinating story that integrates game theory, incentive design and new encryption primitives.
The essence of 33 is to attract users to participate in single-coin pledges, liquidity pledges and low-price bonds by providing high APY incentives to obtain more token rewards. The project team will use the liquid assets it controls to cover the token price. , once the price is lower than the reserve price, repurchase will be carried out.
33 In the early days, there were a lot of buying orders due to the high APY, and the price would spiral upward. As time went by, due to the rise in currency prices, a large number of pledged users sold the interest earned to obtain profits, and the buying orders gradually dried up. , so faced with a large amount of selling pressure from additional issuances, the currency price also fell into a death spiral. If there is no better consumption mechanism or lock-up mechanism, failure will be inevitable.
VE[3,3] mechanism
VE[3,3] was first proposed by Yearn founder AC (Ander Cronje) and deployed on the Fantom chain. VE (voting escrow, voting contract) references Curve's token mechanism. After locking the token, you will obtain VEtoken , Vetoken holders will have the following rights and interests:
Governance rights, the right to determine reward distribution, i.e. mining pool interest rates
Transaction Fees
Lock up rewards and reduce dilution
influence voting
VEtoken NFT, the locked assets will be traded in the secondary market to solve the problem of asset liquidity
Issuance mechanism: Issuance is based on the lock-up amount of VEtoken. The more lock-up, the fewer tokens will be issued, and vice versa. According to the development of the ecosystem, the locked-up amount continues to increase and the issuance continues to decrease. At the same time, as more tokens are unlocked, the impact on the issuance is also attenuating. The weekly supply as a percentage of the total supply will be allocated to VEtoken holders year-on-year to ensure that the tokens of stakeholders are not affected by dilution. The mechanism model of VE [3,3] is currently under continuous development. The improved AMM Velodrome is also a relatively reliable economic model that has been verified so far. After experiencing the practical test of the market, perhaps AC’s ideal flywheel is approaching step by step.
Reverse [3,3] mechanism
This is an out-and-out Ponzi model. Since it has become very popular recently, I will briefly introduce it.
Reverse 33 also provides high APY rewards. Its general mechanism is the same as 33. The difference is that it adds a penalty mechanism. The purpose is to force currency holders to make mandatory pledges. Whether the currency holders hold still or Locked in LP, according to the output of the block, the tokens of the currency holder will be burned. That is, if you hold the currency without moving, your tokens will become less and less. They can only be placed in the contract of the pledge pool. , you can avoid burning and obtain stable APY income. The spiral increase in currency prices is achieved through forced lock-up and burning mechanisms, but it is essentially the same as 33. It only delays the arrival of the crash to a certain extent. Once the buying is exhausted, it is no different from 33. , because of the reason for destruction, its collapse is like the rabbit of the carrot project, see who can run faster.
