🔒Token Economy
Benefit of veJOJO
veJOJO represents the governance rights of the JOJO platform, allowing users to control the future release of JOJO tokens and profit from their governance activities. And ultimately leading JOJO towards complete decentralization
veJOJO can vote to guide trading incentives
Each period, a certain number of JOJO tokens will be allocated for trading incentives, covering both makers and takers. Users can use their veJOJO to vote on one or multiple markets. The more veJOJO a market has, the more token incentives will be given to the traders (both maker and taker) of this market. In return, the fee income of this market will be distributed to veJOJO holders who voted for this pair.
veJOJO can vote to allocate the Open Interest
JOJO's smart contract order is very powerful and can support any liquidity structure, allowing various AMMs and orderbooks to be integrated together. In this structure, the role of the order sender is very important as they need to pre-execute the script in the order to find matching opportunities. Therefore, the system will allow anyone to become an order sender to maximize market efficiency.
However, due to limited market clearing capabilities, order senders will face limited Open Interest (OI). This means that OI has become the most important resource in the supply and consumption of liquidity.
Since the ultimate responsibility for liquidation bad debts on JOJO tokens, and veJOJO holders are most closely tied to the value of JOJO tokens, veJOJO holders have the right to allocate OI quotas. Order senders need more OI to earn transaction fees and spreads through matching trades; thus, they need to share fees with veJOJO holders for voting support.
In this way, veJOJO can share in the benefits of order senders by allocating OI just like builders and researchers share profits in MEV scenarios—allowing veJOOO holders capture as much profit as possible.
veJOJO can propose and vote on any other uses for the tokens
For example, advertising campaigns or customer acquisition airdrops like Layer3 debank tunnl, as well as collaborations with other projects (such as joint mining). These proposals have great flexibility and are very important but are not as straightforward as liquidity incentives. We encourage users to independently submit proposals; any form is acceptable. We will provide additional JOJO incentives to the top three proposal submitters in each cycle based on votes received.
veJOJO can govern platform risk parameters
This includes listing new trading pairs, increasing leverage ratios, raising global open interest limits, changing liquidation fees, etc.
veJOJO
To participate in governance, you first need to convert JOJO into veJOJO.
Earn veJOJO by Locking JOJO
The minimum lock period for JOJO is 7 days, and you can extend it up to a maximum of 4 years. As you increase the duration of your lock, the amount of veJOJO you receive will linearly increase. For example, lock 1 $JOJO for 7 days will yield 0.1 $veJOJO, while a 4-year lock will yield approximately 20.8 $veJOJO.
Transfer of veJOJO
veJOJO is transferable, tradable, and can also be delegated to others. However, to unlock your JOJO token or the JOJO-WETH LP token, you must repay the veJOJO received before.
Earn JOJO Token
For now, one can earn JOJO tokens in the following ways:
Trade
Deposit
Invite friends
Join team competitions
Provide liquidity to JOJO-WETH pool
Pay off bad debt when the insurance fund is unable to cover it
Some JOJO incentives are allocated in the form of esJOJO, which have an expiration date. When this date is reached, you can convert all your esJOJO into JOJO. If you wish to redeem them early, a discount must be paid based on how far away the expiration date is; the further from the expiration date, the fewer JOJO token you can convert. However, you can lock your esJOJOS at any time to convert them into veJOJO for governance participation.
To prevent malicious manipulation of governance during the early stages when token circulation is low, the JOJO token release will be controlled by the team until the total supply of veJOJO exceeds 10 million. After this threshold, token release decisions will be made through votes by veJOJO holders.
Reflections Behind the JOJO Token Economy
Operating a perp dex is a daunting task. We are a small team with limited capabilities and knowledge. However, there is an abundance of collective wisdom among the community members who have more information and are closer to the market than we are. As often mentioned in economics, the "invisible hand" of numerous users making collective decisions drives the exchange towards optimal efficiency. We hope to involve more information and intelligence in building JOJO through token economy design, thereby creating a better product that delivers greater value to users. This is precisely the charm of crypto; it transforms how companies operate and make decisions. This is also why we believe that the token economy is a part of the product.
Why Use veJOJO Instead of JOJO for Governance
Governance decisions, such as setting risk parameters for the platform, allocating platform earnings, and determining how JOJO is released, significantly impact the price of JOJO tokens. To prevent speculators from manipulating governance for arbitrage opportunities, it's crucial to align governance power with responsibility. That is, those who have the ability to influence the price of JOJO must be bound to its long-term performance. This ensures they are motivated to make decisions that are most beneficial for JOJO.
Why Incentivize Both Makers and Takers
For exchanges, makers and takers are equally important; an exchange’s primary role is to facilitate a match between these two parties' needs. This is especially true for perp dexes where good liquidity alone isn't enough—sometimes the flow of orders from takers is even more critical than having good liquidity. With a stable flow of orders from takers, many institutions would be willing to provide liquidity free of charge.
Why Encourage Users to Submit Proposals Beyond Trading Incentives
We need to use tokens in the most efficient way possible; therefore token governance should not be confined within a single framework. However, governance requires time and effort—especially in proposing initiatives—and participants are few and far between. Therefore we offer additional incentives for those submitting proposals as a reward for their contributions.
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