# 📈Tokenomics

#### **$Luma**

$Luma, a utility token built on the BRC-20 standard, strategically cultivates and fosters the protocol by incentivizing key roles through token emissions.

#### **$veLuma**

1. $veLuma is an BRC-721 governance token, representing a non-fungible token in the form of a NFT, it is used for governance purposes within the protocol. Any $veLuma token holder can vote-escrow their tokens and receive $Luma emission.
2. The lock period of $Luma tokens determines the amount of $veLuma voting power received, with longer lock periods yielding more voting power.

### **Specifications** <a href="#td98tdh09zax" id="td98tdh09zax"></a>

1. **ve(3,3) Mechanics**: The protocol incorporates the ve(3,3) Mechanics concept, combining the anti-dilution method from Olympus DAO with Curve's vote-escrowed model. This mechanism aims to protect veLuma holders from dilution and allows for a dynamic distribution of veLuma tokens among participants. The maximum anti-dilution level is set at 10%. ve(3,3) has proven to align the incentives of token holders and liquidity providers which has resulted in, among other things, market outperformance of projects.
2. **Gauge**: A gauge represents a pool that offers dynamic $Luma rewards based on the veLuma holders' weekly voting allocation. Negative voting is not allowed.
3. **Bribes**: External parties have the option to offer custom amounts of tokens as bribes on a specific gauge to veLuma holders in exchange for their votes.
4. **Max Lock:** The maximum lock period for $Luma tokens is set at 2 years. Locking $Luma tokens for this period allows users to earn veLuma tokens with increased voting power.
5. **Farming Boost**: The protocol intentionally does not include a farming boost feature to prevent the emergence of profit-maximizing protocols on top of Luma. Instead, the focus is on fostering dynamic and decentralized governance over the emissions of $Luma tokens.
6. **Flexibility**: veLuma positions can be merged, split, and traded on the secondary market. This provides flexibility for veLuma token holders to manage their positions and participate in the market.


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