Vote escrow (ve) is a tokenomics mechanism in which holders lock governance tokens for a chosen duration in exchange for non-transferable, time-decaying voting power and often boosted protocol rewards. Popularised by Curve’s veCRV model, it aligns voter incentives with long-term protocol health by rewarding commitment over short-term speculation. Locked positions decay linearly to zero at unlock, requiring periodic re-locking to maintain influence.
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- The veToken model couples governance with emission direction (gauge voting) and fee sharing, spawning a “bribe” market where protocols incentivise lockers to steer rewards. Trade-offs include reduced token liquidity, governance capture by large lockers, and the operational burden of managing decaying, illiquid positions.