mev-toolkit/tokenomics/voter_escrowed_tokens.md

ve (voter escrowed) tokens

tl; dr

1. you lock up your token (say CRV), and it's converted (to say veCRV), which has the governance power of the protocol
2. the lock period isn't fixed: the token holder can decide how long they want to lock (max 4 years0
3. as time goes on through the lockup period, the amoun of token (say veCRV) that a holder has decays lineraly, incentivizing the holder to periodically relock ther original token (say CRV) for ve token (say veCRV)
4. this creates weighted votes and rewards, plys once converted, the tokens are locked with no unstaking options

effects

• short-term governance protection against whales (tokens are locked up)
• fliexibility to choose locked up period