> For the complete documentation index, see [llms.txt](https://docs.splash.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.splash.trade/splash-token/ve-splash.md).

# $veSPLASH

To get the share and voting power users must participate in the locking process, also known as [vote-escrow](/concepts/protocol-concepts/vote-escrow.md). In combination with [gauges](/gauges/understanding-gauges.md), such a system is designed to build deep liquidity, promote long-term token-holder alignment, and facilitate fair protocol fee distribution.

By locking `SPLASH` tokens, users receive `veSPLASH`, a **non-transferable token** representing both the share and voting power in the Splash Protocol.

## Protocol share and voting power

Instead of granting protocol share and voting power just with the token amount $$a$$, in Splash Protocol 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 share is equal to:

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

After the moment of the lock, `veSPLASH` decreases over time. In other words, the voting power and share are 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:

<figure><picture><source srcset="/files/fgmHZW30pGD0lCFcsO9c" media="(prefers-color-scheme: dark)"><img src="/files/Cwuj2Eh29YgB91xgO3jT" alt=""></picture><figcaption></figcaption></figure>

<details>

<summary>Example</summary>

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.

</details>

Users are also given an option to maintain their lock time so their voting power and share stays constant.

## veSPLASH holders

`veSPLASH` has the following uses:

1. **Governance**

`veSPLASH` holders can make various collective decisions, which are recorded on-chain and executed automatically. Users can vote for various proposals, such as changing protocol parameters or spending the treasury.

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 gauges](/gauges/understanding-gauges.md)

3. **Protocol fees**

{% hint style="warning" %}
1**00% of all protocol fees can be claimed weekly by veSPLASH holders.**
{% endhint %}

Each Splash liquidity pool includes a small fee, usually 10% of the total pool fee. We call it Protocol Fee. This is redirected to a distribution system, allowing veSPLASH holders to claim weekly rewards. The token portion of the fee is TWAMMed[^1] to ADA, ensuring that rewards are paid out entirely in ADA.

<figure><img src="/files/hiWqyNFtSYJut81a6xDw" alt=""><figcaption></figcaption></figure>

[^1]: An on-chain equivalent of the TWAP order