$veSPLASH

To get DAO weight and start voting users must participate in the locking process, also known as voting-escrow. Such a system in combination with Smart Farms is designed to build deep liquidity, promote long-term token-holder alignment, and facilitate fair protocol fee distribution.

By locking ADA/SPLASH 20/80 Liquidity Provider (LP) tokens, holders are given veSPLASH, a non-transferable token that represents the weight of your DAO rights in the Splash protocol.

DAO Weight

Instead of granting DAO weight just with the token amount $a$, in Splash DAO tokens are lockable in a Voting Escrow Contract for a selectable lock time $t_l$, where $t_l < t_{max}$, and $t_{max} = 1 year$. After locking, the time left to unlock is $t ≤ t_l$. The DAO weight is equal to:

$$w = a{t\above{1pt} t_{max}}$$

After the moment of the lock, the DAO weight of veSPLASH decreases over time. In other words, the ownership weight is both amount and time-weighted, where the time counted is how long the tokens cannot be moved in the future. The following chart demonstrates the logic:

Example

Bob has 20 ADA and 20 SPLASH tokens. He provides liquidity to the ADA/SPLASH 20/80 LP and gets, let's say, 1000 LP tokens. This 1000 LP token is a representation of his liquidity position. He would like to get maximum ownership weight. So he locks 1000 of his LP tokens for 1 year (max lock) and gets 1000 veSPLASH. Now he has 1000 ownership weight points and can benefit from the DAO. However, let's say 6 months have passed. If Bob has never relocked his LP tokens until this point, his ownership weight will drop twice to 500 ownership weight points.

veSPLASH Uses

For now, veSPLASH has the following uses:

1. Governance

veSPLASH holders can make various collective decisions that are recorded on-chain and executed automatically. There are a few different proposals that users can vote for such as changing protocol parameters

Explore Governance

2. Inflation control

A special multi-poll governance proposal type is introduced to control the SPLASH distribution among liquidity providers. veSPLASH holders can vote for various pools in the system and decide which one deserves more rewards.

Understanding Smart Farms

3. DAO Fees

50% of all DAO fees can be claimed by veSPLASH holders weekly as DAO Rewards.

DAO Fees

DAO Dashboard

Once the protocol is launched in the Cardano mainnet, the Splash community will have access to the DAO Dashboard interface where users can check all information about the current state of the DAO weight, distribution of Smart Farms weights, and more.