Background

Almost every protocol in DeFi needs to have a certain amount of liquidity for one reason or another. However, current solutions for incentivizing liquidity come with their own tradeoffs and pitfalls:

• Pool 2 emissions (i.e. attaching a reward to staked LPs) can be costly to maintain, and oftentimes result in a "farm and dump," resulting in "unsticky" liquidity.

• Protocol-owned liquidity can be costly to bootstrap, and liquidity may only be needed occasionally, instead of ongoing basis.

• Bribing voters in the CRV/CVX system can be costly as incumbents already have a sizeable lead. Additionally, the universe of pool types here is limited.

As a result, the DeFi field needs a brand-new way to incentivize users to provide liquidity, and make contributions to the platform. That's the reason why Andre Cronje has created ve(3,3) tokenomics, and why we are building Pound Swap.