oTokenomics is a relatively new concept in DeFi, and especially new to ve(3,3) DEXs. With oTokenomics, we can ensure that veCRST holders are being rewarded with maximum incentives, while at the same time discouraging mercenary farm and dump strategies on the DEX.

oTokenomics is a fundamental shift in the way that liquidity is incentivized, and shifts value from farmers looking to extract profits at the expense of protocol to loyal stakeholders of the protocol.

$oCRST Emissions

Instead of traditional emissions in the form of $CRST that could be immediately dumped into the market, liquidity is incentivized through $oCRST, which is the the option call version of $CRST. Essentially, someone with $oCRST in their possession can do three things with it:

1.) Exercise the option and purchase $CRST 1:1 at a discount with $USDC

  • example - current $oCRST discount is 70%. Farmer A has 100 $oCRST tokens from emissions (let's say market price of $CRST is $1 for this example). He decides to exercise his option and redeem his $oCRST for $CRST. He will pay $30 in $USDC tokens, and receive 100 $CRST.

2.) Convert $oCRST to max locked veCRST 1:1

If the user decides to convert their $oCRST to veCRST, there is no fee to do so. This entitles the user to begin voting with their veCRST and earn massive real yields as a result of our efficient fee and bribe generation mechanisms.

3.) Sell $oCRST through the $oCRST/$CRST LP on Crust

The user can sell their $oCRST on the market to avoid paying the discounted fee. Should the $oCRST peg fall below the discount price, it would behoove the user to exercise their option instead.

Assuming $oCRST price will hover around the discounted option rate, this also opens up an avenue to acquire discounted veCRST, as $oCRST could be purchased on the market at a lower price and locked to veCRST for no fee.

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