The LockDrop contract is a contract that allows Velocimeter to reward users that deposit liquidity pool (LP) tokens into predetermined gauges for a predetermined lock time
The main purpose of this contract is to bootstrap initial liquidity TVL for a time and reward those participants. However, this contract can be redeployed at any time to the same effect for future campaigns.
For a new launch, having some amount of liquidity committed to a DEx can help to create stability for the trading experience.
Users that deposit their LPs via a LockDrop will have their token quantity recorded inside, but their tokens will be deposited in the standard gauge for that LP. At the end of the campaign the users can claim pro-rata rewards of any reward token.
A user that deposits on the first day will be rewarded with the same amount of reward tokens as a user that deposits on the last day, assuming they deposit the same amount of LP tokens. The early depositor gets the benefit of being able to retrieve their LP tokens earlier than the latter.
Mantle Launch
For the Launch on Mantle, Velocimeter will deploy several LockDrop contracts for the following pools.
In the table above, you can also observe a ldMVM Budget and a Target TVL. The ldMVM budget is the total amount of ldMVM that will be rewarded if an only if the Target TVL is achieved. If less TVL is achieved, then fewer ldMVM reward will be granted. If more TVL is achieved, there WON'T be extra budget allocated.
For example, if only 1mm TVL is achieved in the USDC-USDT pool by the end of the campaign, then only 50,000 ldMVM will be granted to those users. But, if 2.0mm TVL is achieved then only 100,000 ldMVM tokens will be shared with all lockers
Lock durations for this campaign will be 42 days for each LP
The Rewards
The users will be rewarded with ldMVM (LockDrop Mantle VelociMeter) options tokens. These option tokens, with MVM inside them, can be exercised in the following manner without any exercise cost applied.
A user can use any quantity of ldMVM to exerciseVe to receive veMVM at no cost. These are 1 year lock voting NFTs.
A user can use any quantity of ldMVM to exerciseLP to build MVM/MNT LP tokens which will be locked in the MVM/MNT gauge for 3 months. These users will need to supply the needed MNT tokens to build these LPs.
The benefits of the two types of exercising are as follows:
veMVM holders are able to vote to direct the emissions of oMVM to gauges for LPs that are supported on Mantle Velocimeter, and to collect bribes and fees according to their vote.
LP lockers will earn both oMVM and the exercise costs that come from users exercising oMVM in the form of MNT tokens.
A full explanation of oMVM tokens is beyond the scope of this article, but for those that aren't familiar, here is a small TL-DR.
oMVM has varying costs to exercise, and can be exercised in 3 ways with costs and descriptions below.
Exercise Liquid - 90% cost - User receives liquid MVM tokens.
Exercise LP - 40~80% cost - User builds MVM/MNT LP tokens, and pays a cost that scales based on their selected lock time in the gauge.
Exercise VE - 10% cost - User receives a veMVM NFT that grants them voting rights.
If you would like a fuller understanding of the options token design at Velocimeter you can visit our Documentation here, or watch this playlist on Ceazor's Snack Sandwich Youtube
The Budget, The Burn, and The Bull
Some simple math using the table above will show that 2.1 million MVM have been earmarked for this LockDrop campaign. However, we have also earmarked 1 million MVM token for partners that wish to take part in the LockDrop campaign. Each partner will have it's own specific parameters, such as lock duration, TVL Target, and ldMVM allocation. These numbers will be announced as they are solidified with those projects.
The team's allocation is completely dependant on the results of the campaign. An additional 15% of the total rewards distributed to LockDrop will be granted to the team to be divided amongst them.
Any and all remaining MVM tokens will be burnt. After this campaign, the only way to obtain MVM, or veMVM will be by farming oMVM to exercise, by buying from the market, or from the MasterBooster. For an explanation of the MasterBooster see this article, or the videos listed above.
In Conclusion
This LockDrop campaign is the newest innovation by the team at Velocimeter. We hope that this will create a more consistent user experience for user, and to reward users that take longer term commitments to the protocol.
We add this innovation to the long list of innovations that we have added to the stack and are keen to bring more in the future.
We have since our initial deployment brought the following innovations:
Fees that went directly as bribes and were claimable at epoch flip.
Option token emissions, with exercise(), exerciseLP(), exerciseVE().
A Maxxing Gauge that collects the revenue from oTOKENs and gives it to LP Providers.
Emissions can be doubled or halved each epoch.
A mintTank that holds pre-minted tokens, but can ONLY be used to mint veNFTs.
Fees can be adjusted on a pool by pool basis.
AutoBribe contracts that allow projects to fund bribes for multiple weeks.
VelocimeterPro which allowed projects to use oTOKENs for bribes/rewards.
Factory Arrays, that allow for new innovations without changing current deployments.
The MasterBooster that uses a portion of emission to incentives actions that buy and lock emission tokens.
The ExerciseSortoor that takes a portion of options revenue is uses it to buy emission tokens and sends them to the MasterBooster.