What is a metaDEX?
Automated market makers have evolved through three key stages. Uniswap and Sushiswap pioneered permissionless liquidity but offered little alignment between providers and token holders. Curve advanced the model with vote-escrowed governance, improving incentives but adding complexity. Solidly’s ve(3,3) combined vote-escrow with emission control, creating a powerful incentive loop but also introducing manipulation risks, fragmented liquidity, and a difficult user experience.
The metaDEX concept builds on these lessons, shifting focus from simple trading venues to liquidity coordination layers that align all participants in a sustainable system.
What is Vote Escrow (ve)?
Vote Escrow, or ve, is a token model where users lock tokens for governance rights and rewards. The longer the lock, the greater the voting power, with power decaying as the lock approaches expiry.
This system, introduced by Curve (veCRV), aligned token holders with long-term protocol success. While effective, it also introduced complexity: users had to continually re-lock tokens to maintain influence.
Why HOOKED’s Binary Locks Matter
Traditional vote-escrow models tie governance power to time-based locks. For example, a user locking tokens for four years begins with maximum voting power, but that influence steadily declines until expiry. To maintain full power, users must constantly re-lock, creating friction and discouraging long-term participation.
Binary locks eliminate this problem by removing time decay. Once tokens are locked, voting power remains constant until vested to unlock. This simplifies user experience, ensures predictable governance influence, and removes the need for endless re-locking cycles. Governance becomes a stable, long-term commitment directly supporting protocol sustainability.
Exit Mechanism
When a user flags their $veHOOKED position for exit, a 365-day vesting period begins. Voting power transfers to the vesting contract, which automatically votes weekly in an optimal, protocol-aligned way.
Earnings during vesting are redirected to purchase $HOOKED and fund ecosystem programs such as Lock Incentivization Program. Users may claim the percentage of tokens already unlocked, but unvested balances are forfeited to the contract. This ensures orderly exits, protects protocol stability, and channels value back into growth initiatives.
The Misalignment Problem
A central flaw in traditional DEX design lies in the misalignment of incentives across stakeholders. Token holders typically want higher prices, strong revenue generation, and long-term sustainability. Liquidity providers, by contrast, are motivated by maximum yield, limited exposure to impermanent loss, and the ability to exit quickly. Traders prioritize low fees, deep liquidity, efficient execution, and protection from MEV extraction. Protocols themselves need predictable depth, sustainable liquidity, and affordable incentive structures that support enduring partnerships.
Because these goals often conflict, traditional liquidity programs tend to become unsustainable. Liquidity mining leads to constant provider churn, liquidity depth fluctuates unpredictably, and protocols are forced to spend heavily just to retain participants.
Traditional ve(3,3) Issues
Andre Cronje’s ve(3,3) model attempted to balance incentives by extending rewards to token holders. However, it relied on long lock-ups and high friction. Only users willing to commit for years could participate equitably, and rewards often skewed toward protocols. The lack of an exit mechanism trapped liquidity and discouraged broader adoption.
As a result, persistent misalignment continued: token holders wanted sustainable value accrual, LPs wanted flexible yield, traders wanted low fees, and protocols wanted predictable depth. Liquidity programs devolved into unsustainable mining schemes, constant churn, and volatile liquidity.