Dystopia, a decentralized exchange (DEX) designed to offer improved emissions and incentive mechanisms, is launching on Polygon. The platform is the first DEX on Polygon to use the ve(3,3) model and provides users with a seamless swap experience for both closely correlated and non-correlated asset pairs at a nominal 0.05% trading fee. The platform enables users to cheaply execute very large or small trades without experiencing high slippage.
Based on Uniswap v2 and Curve Stable Swaps, Dystopia combines incentive mechanisms alongside a new liquidity foundation that sets it apart from typical DEXs.
In brief, ve(3,3) is an incentive mechanism that rewards investors for locking their tokens within a particular protocol over a set period of time. By locking the native token, DYST — by staking it for veDYST (vote-escrowed DYST) — investors can tap into governance opportunities and earn rewards from the protocol to incentivize their liquidity contribution.
Those who choose to lock DYST for veDYST are eligible to earn protocol fees in a way comparable to that of traditional staking. Similarly, those who provide liquidity to the DEX will also be entitled to earn DYST rewards to further incentivize the provision of liquidity to support the entire ecosystem. This grants investors access to the DEXs governance infrastructure and increases the community’s contributions to the wider protocol.
Since DYST holders want to maximize their fee revenue, the protocol is designed to naturally arrive at an equilibrium of locked DYST and DYST emissions. In essence, Dystopia’s ve(3,3) setup incentives users to deposit their assets into liquidity pools instead of their DYST.
As part of the launch, Dystopia will provide 10% of its initial token supply to the Polygon DAO enabling proceeds from the project to support future DeFi offerings. In doing so, Dystopia will bolster the development of the Polygon ecosystem and the DeFi protocols seeking to harness the power of the Polygon ecosystem for the greater good.
To learn more about Dystopia, head over to their medium blog.
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