# Chronos Introduction

By [OxFrancesco](https://paragraph.com/@oxfrancesco) · 2023-04-08

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[https://medium.com/@chronosarbitrum/the-pillars-of-chronos-pt-3-understanding-the-chronos-flywheel-1cbd2d47ddfd](https://medium.com/@chronosarbitrum/the-pillars-of-chronos-pt-3-understanding-the-chronos-flywheel-1cbd2d47ddfd)

[https://chronos-finance.gitbook.io/product-docs/introduction/the-chronos-flywheel](https://chronos-finance.gitbook.io/product-docs/introduction/the-chronos-flywheel)

    🌌 VE(3,3) MODEL
    

**The VE (3,3)** Economic model addresses the challenges of incentivizing liquidity providers (LPs) and ensuring revenue accrual for decentralized exchange (DEX) governance token holders.

Our innovative approach creates a self-sustaining flywheel that balances incentives and rewards, ultimately promoting long-term growth and stability.

In essence, this model is designed to enhance liquidity in certain pools by utilizing the voting power of VE (Vested) NFTs.

**The longer you lock your NFT, The greater your voting power is:**

**If you lock 1K Tokens:**

1.  1yrs: 250 veTokens
    
2.  2yrs: 500 veTokens
    
3.  3yrs: 750 veTokens
    
4.  4yrs: 1K veTokens
    

When you vote for a pool using your NFT, you will not only receive a share of the pool fee and bribes but also typically a rebase (Not in this case).

**Unique Fee and Incentive Structure:** Includes directing all trade fees to $veCHR voters, incentivizing LPs with $CHR emissions, and supporting $CHR emissions through transaction revenue and utility.

Ensures high utility and rewards for holding and locking the $CHR token.

**Harmonized Incentives:** The ve(3,3) model harmonizes the incentives of all participants in the Chronos protocol, including $veCHR voters, liquidity providers, traders, and protocols.

By aligning these incentives, Chronos makes it possible for everyone in the ecosystem to benefit.

Following meticulous research, the Chronos team has determined that the zero-rebase model serves as the optimal approach for the enduring stability and sustainability of the project.

This model ensures advantageous economic incentives for all participants and attracts new protocols while mitigating supply centralization among early adopters.

To reward early adopters without jeopardizing the project’s long-term sustainability, Chronos has set aside 5% of $CHR initial supply as an airdrop bonus for users who lock over 1,500 $CHR for two years.

These users will receive 20% of their locked position as a bonus $veCHR NFT.

The most effective method to encourage the locking of $veCHR is through education around the model.

Users locking will be rewarded in the form of high and sustainable APR from real revenue streams.

![](https://storage.googleapis.com/papyrus_images/8f2e2bbaccad043a0a72999e92db4e55b419f69753b88deb7f2ad05f671d00fc.webp)

**Maturity Adjusted LPs:** To overcome challenges presented by market volatility and create “sticky” liquidity, Chronos has introduced the concept of Maturity Adjusted LPs.

By introducing an emissions boost based on maturity, liquidity providers are incentivized to maintain their liquidity position during times of price volatility.

This revolutionizes the Chronos flywheel by ensuring that liquidity remains on the platform.

![](https://storage.googleapis.com/papyrus_images/dbe687501b0f3371b4ee5841a790142bc00b213d0dbb4728f4671179dc147a4c.png)

    🌌 Lost Key Holder Benefits
    

![](https://storage.googleapis.com/papyrus_images/4b170ecd8e068517bcfedcd127a54234a3215667f40dc8261b62329f149f7a0f.png)

*   **Royalties for Minters:** 2% of secondary sale royalties will go to chrNFT minters for life. This is regardless of whether they hold or stake their NFTs or not. These funds will be distributed monthly
    
*   **Royalties for Stakers:** 1% of secondary sale royalties will be added to the staking pool and will be claimable by those that stake their chrNFTs
    
*   **Fee Revenue for Stakers:** a portion of all trading fees generated by the DEX will be distributed to chrNFT stakers
    
    *   NFTs must be staked to earn fees. The chrNFT fee schedule is as follows:
        
        *   Months 7-∞: 10%
            
        *   Months 4-6: 15%
            
        *   Months 1-3: 20%
            

[https://mirror.xyz/oxfrancesco.eth/vCESyVjTkUolXtgYDLaLAYo1gpEFjyUE3topXnN8VeE](https://mirror.xyz/oxfrancesco.eth/vCESyVjTkUolXtgYDLaLAYo1gpEFjyUE3topXnN8VeE)

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*Originally published on [OxFrancesco](https://paragraph.com/@oxfrancesco/chronos-introduction)*