Augusta Finance operates as a liquidity-releasing protocol and governance point, firmly embedded in the Velodrome Finance ecosystem. Its innovative solutions allow users to secure instantaneous veVELO NFT-backed loans while concurrently simplifying access to Velodrome Finance governance power.
Understanding Velodrome Finance
Velodrome Finance constitutes a ve(3,3) DEX built upon the Optimism network. It amalgamates liquidity from various protocols on Optimism via the veVELO bribery mechanism. As an NFT, veVELO can be transferred amongst individuals through the platform's official NFT Marketplace, thereby enabling holders to reap multiple income sources such as bribery fees, swap fees, and veVELO rebase. As the current reigning protocol within the Optimism ecosystem, Velodrome Finance's governance power equates to mastery over a substantial portion of all liquidity in the Optimism ecosystem.
Challenges and Augusta Finance Solutions
There are existing issues with the liquidity release of veVELO NFTs and the standard PFP NFT lending protocol. These flaws stem from the Convex fork model's disadvantages and the intrinsic properties of PFP NFTs, respectively. Augusta Finance, acknowledging the financial advantages of NFTs like veVELO, has introduced a collateral lending product tailored for veVELO NFTs.
The current conventional model, the Convex model, though useful, has some drawbacks, including the issue of liquidity receipts facing considerable discounts in the secondary market and the model's inability to yield positive external returns. Furthermore, mainstream PFP NFT lending models, including BendDAO's P2Pool model and Blend's P2P model, face problems regarding NFT collateral, forcing the protocol to utilize its token as a liquidity incentive and creating an imbalance in the supply and demand of the protocol token.
Augusta Finance, keen on providing innovative answers, adopts the NFT collateral lending model to address issues regarding governance and liquidity. This model capitalizes on the interest-bearing and governance properties of veVELO NFTs, effectively mitigating problems within the PFP NFT lending protocols.
A Look at Augusta Finance's Tokenomics
Augusta Finance's token distribution plan encompasses several sectors. For example, a substantial 45% incentive goes into the ETH pool (62%), the borrowing pool (33%), and the AUGU liquidity pool (5%), all with a vesting period of three years and monthly decay. Other allocations include 20% for partnership and growth, 15% for IDO, 10% for treasury, 2% for trigger, 3% for airdrop, and 5% for reserve, with one year of vesting.
$AUGU token, with a total supply of 100,000,000, serves as the governance token of the platform, primarily serving for liquidity incentives and staking rewards. In the initial V1 stage, Augusta Finance operated as the proxy for veVELO governance. Upon the transition to V2, Augusta Finance relinquished its voting power for veVELO and transferred this voting power to $AUGU token holders.
Staking $AUGU brings substantial benefits. In the V1 version, stakers enjoyed dividend rights, with a portion of the interest generated from lending and earnings from veVELO used to repurchase $AUGU tokens and distributed to stakers. In the updated V2 version, staking rewards also come with voting power for veVELO, allowing stakers to decide the purpose of their voting power independently.
Augusta Finance, by focusing on the veVELO NFT's financial potential, is slowly reshaping the NFTFi industry. Its innovative approach promises to solve several issues plaguing the current financial system, right from liquidity up to governance power. All in all, Augusta Finance is set to become an instrumental player in the crypto world.
