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| Let's discuss the "ve" in veOCEAN for our last jitsu before earning a black belt in Data Farming knowledge! |
DF "ve" in veOCEAN (Brown Belt)
Data Farming is getting effortless.
veOCEAN is the vote escrowed capability of the $OCEAN token through veTokenomics model (vote-escrowed token economics). veOCEAN is used to participate in on-chain governance, and earn rewards within the Ocean Protocol ecosystem. veOCEAN is architected to be staked or 'locked' for a certain period of time and cannot be transferred or sold during the lock time that is determined by each user.
Holders of veOCEAN can use it to vote on proposals or delegate their voting power to other stakeholders. Additionally, there are be other benefits associated with holding and staking veOCEAN, such as access to passive & active rewards in data farming or discounts on fees within the network.
Here is Ocean Protocol's open-source code for veOCEAN. Note, it is similar to Curve Finance's veCRV token code.
WARNING: You will not be able to retrieve your original OCEAN deposit until the lock ends.
What can I do with veOCEAN?
veOCEAN allows you to engage with different protocol mechanisms and benefit from the reward programs available.
4 key utility functionalities of veOCEAN:
- Holding it veOCEAN pays Passive Rewards every week.
- Allocating it veOCEAN pays Active Rewards every week to the top performing Datasets, Algorithms, dApps, and more.
- Delegating it You can delegate veOCEAN to other Data Farmers who can curate Datasets for you. In return for their services, these farmers may charge you a fee for helping you receive APY on Active Rewards. The Delegate feature has just been recently released and enables veOCEAN holders to more easily access Active Rewards.
- 2x Publisher Stake If you are a publisher to the Ocean marketplace, allocating veOCEAN to your own Dataset gives your veOCEAN a 2x Bonus. This is an incentive for publishers to engage with their assets and benefit from from the protocol further.
veOCEAN holders retain earnings from two sources: Active & Passive Rewards
Active Rewards from Community Fees
Every transaction in Ocean Market and Ocean Protocol backend infrastructure generates transaction fees, some of which are distributed to the community. 50% of the community fees will go to veOCEAN holders, 50% will rest and allocate to Ocean community-oriented traction programs.
Passive Rewards from Data Farming
veOCEAN holders will each get weekly DF rewards allocation, except a small carveout for any Data Challenge initiatives that may run through DF ops.
veOCEAN holders can be passive, though they are incentivized with larger real yield if active participant.
“Being active” means allocating veOCEAN to promising data assets (data NFTs). Then, rewards follow the usual DF formula: DCV * stake. Stake is the amount of veOCEAN allocated to the data asset. There is no liquidity locked inside a datatoken pool. (And this stake is safe: you can’t lose your OCEAN as it is merely locked.)
Time Locking: What is it
Users can lock their OCEAN for different lengths of time to gain voting power. df.oceandao.org is designed to lock OCEAN for a minimum of 2 weeks and a maximum of four years for max benefit. VeToken-economics is simple: The longer user stakes, the more rewards users are eligible to earn.
When users commit to locking their OCEAN tokens for an extended time duration, they are rewarded with an increased amount of veOCEAN tokens. This incentivizes users to have act with strong network support and confidence in the ecosystem.
| Year | Lock Multiplier | veOCEAN |
|---|---|---|
| 1 | 0.25x | 0.25 |
| 2 | 0.50x | 0.50 |
| 3 | 0.75x | 0.75 |
| 4 | 1.00x | 1.00 |
The Lock Multiplier. Amount of veOCEAN received per OCEAN locked.
If you’ve locked OCEAN for 4 years, you will be unable to retrieve your deposit until this time expires.
After choosing your lock period and locking up your OCEAN into the vault, you will be credited with veOCEAN.
veOCEAN is non-transferable. You can’t sell it or send it to other addresses.
Linear Decay
Your veOCEAN balance will slowly start declining as soon as you receive it.
veOCEAN balance decreases linearly over time until the Lock End Date. When your lock time has lapsed by 50%, you will have 50% of your original veOCEAN balance.
When your lock time ends your veOCEAN balance will hit 0, and your OCEAN tokens can be withdrawn.
If you lock 1.0 OCEAN for 4 years, you get 1.0 veOCEAN at the start.
| Years Passed | veOCEAN Left |
|---|---|
| 1 year | 0.75 |
| 2 years | 0.50 |
| 3 years | 0.25 |
| 4 years | 0.00 |
At the end of your 4 years, your OCEAN is unlocked.
Linear Decay
Your balance of veOCEAN may be less than the amount when you first locked your tokens because your veOCEAN balance decreases linearly over time until the Lock End Date when you can withdraw your OCEAN tokens. This is because rewards are designed to be paid out weekly in a decreasing amount until you unlock your OCEAN tokens entirely. The veOCEAN code is a fork of Curve's battle tested veCRV token code.
Withdrawal
After the Lock End Date, then you can withdraw your principal OCEAN tokens on the veOCEAN page on the left side panel.
Replenishing your veOCEAN
You can choose to update your lock and replenish your veOCEAN balance at any time.
To maximize rewards, participants would need to update their 4-year lock every week in order to maintain their veOCEAN balance as high as possible.
veOCEAN Earnings
All earnings for veOCEAN holders are claimable in Ethereum mainnet. (Data assets for DFing may published in any network where Ocean’s deployed in production: ETH Mainnet, Polygon, etc.)
Data Farming rounds occur weekly; in line with this, there’s a new ve distribution “epoch” every week. This affects when you can first claim rewards. Specifically, if you lock OCEAN on day x, you’ll be able to claim rewards on the first ve epoch that begins after day x+7. Put another way, from the time you lock OCEAN, you must wait at least a week, and up to two weeks, to be able to claim rewards. (This behavior is inherited from veCRV. Here’s the code. )
Flow of Value
The image below illustrates the flow of value. On the left, at time 0, the staker locks their OCEAN into the veOCEAN contract, and receives veOCEAN. In the middle, the staker receives OCEAN rewards every time there’s revenue to the Ocean Protocol Community (top), and also as part of Data Farming rewards (bottom). On the right, when the lock expires (e.g. 4 years) then the staker is able to move their OCEAN around again.
Flow of Value
The veOCEAN design is in accordance with the Web3 Sustainability Loop, which Ocean uses as its system-level design.
The veOCEAN code was forked from the veCRV code. veCRV parameters will be the starting point. To minimize risk, tweaks will be circumspect.
Security
veOCEAN core contracts use veCRV contracts with zero changes, on purpose: the veCRV contracts have been battle-tested since inception and have not had security issues. Nearly 500 million USD is locked across all forks of veCRV, with the leading DeFi protocols adopting this standard. veCRV contracts have been audited by Trail of Bits and Quantstamp.
We have built a new contract for users to point their veOCEAN towards given data assets (“allocate veOCEAN”). These new contracts do not control the veOCEAN core contracts at all. In the event of a breach, the only funds at risk would be the rewards distributed for a single week; and we would be able to redirect future funds to a different contract.
We have an ongoing bug bounty via Immunefi for Ocean software, including veOCEAN and DF components. If you identify an issue, please report it there and get rewarded.