Users can stake CHEDDA tokens to get xCHEDDA. xCHEDDA can then be locked for a period 1 week to 104 weeks (2 years) to mint veCHEDDA. Thus, staking CHEDDA is a prerequisite for getting veCHEDDA.
Accounts that hold veCHEDDA can participate in governance votes.
20% of CHEDDA token emission is directed to the Safety and Staking Module to be distributed to stakers while 80% gets sent to token vaults to be distributed to liquidity providers. The portion of tokens sent to each vault is determined by a weekly community vote by veCHEDDA token holders. Thus, token holders determine which pools are incentivized for lending and borrowing with new token emission.
Asset support in token vaults is determined by community votes.
Specifically community votes determine:
- 1.Which assets can be borrowed from token vaults.
- 2.Which assets can be used as collateral.
This incentivizes crypto and NFT projects to secure veCHEDDA so their tokens can be supported by the protocol.