> For the complete documentation index, see [llms.txt](https://aiw3.gitbook.io/aiw3/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://aiw3.gitbook.io/aiw3/governance/understanding-veaiw3-and-the-vetoken-model.md).

# Understanding veAIW3 and the veToken Model

The **veToken model** was first introduced by Curve Finance, designed to align incentives and promote long-term participation of token holders.

In this mechanism, users lock native tokens to generate “veTokens.” During the lock-up period, they gain governance rights, fee-sharing, and protocol rewards. The longer the lock-up, the more veTokens are minted—resulting in greater voting power, higher dividends, and deeper governance participation.

This design effectively reduces short-term speculation, encouraging holders to establish long-term alignment with the protocol and providing sustainable momentum for ecosystem growth.

**AIW3** has optimized this model by launching **veAIW3**. Users can lock AIW3 tokens to generate veAIW3, thereby becoming core governors and long-term beneficiaries of the ecosystem. Holding veAIW3 not only grants governance rights but also direct participation in revenue distribution, token buyback decisions, and long-term incentive sharing.

This mechanism ensures that participants who are truly committed to building and growing AIW3 will drive its future and share in the ecosystem’s sustainable growth.

As the **AIW3 DAO** transitions to the veToken model, governance power will gradually be handed over to veAIW3 holders.veAIW3 holders will be able to vote on key parameters, such as:

* Treasury fund usage
* Buyback priorities
* Incentive allocations
* Ecosystem expansion

However, this transition toward decentralized governance will not happen overnight. Instead, it will follow a progressive evolution:

* **Initial Stage:** To safeguard the protocol and prevent malicious proposals, the AIW3 core team will retain veto power over harmful proposals. This serves as a stability safeguard during the early phase.
* **Progressive Delegation:** As the ecosystem matures and veAIW3 holders deepen their participation, more key decision-making power will gradually be transferred to the community.
* **Full DAO:** Ultimately, AIW3 will evolve into a fully decentralized DAO, where governance is entirely controlled by veAIW3 holders, ensuring all decisions align with the community’s long-term interests.

### Emergency Committee

To balance decentralization with security, AIW3 has established an **Emergency Committee** during the transition phase.In AIW3’s governance architecture, governance power will initially remain with the AIW3 team to ensure stability and safety in the early stage. Over time, this power will gradually shift to the community, led by veAIW3 holders, achieving true decentralization.When faced with potential malicious proposals or major security threats, AIW3 can intervene to block or mitigate them, preventing irreversible harm to the protocol.The ultimate goal is **full DAO-ization**—where governance power and revenue distribution are decided solely by veAIW3 holders. The team and the Emergency Committee will gradually fade out, serving only as early-stage safeguards.

### Rewards & Incentives for veAIW3 Holders

To participate in AIW3 governance voting, users must lock AIW3 tokens to obtain veAIW3. Once veAIW3 goes live, holders will gain not only governance rights but also revenue sharing and influence over buyback priorities.The incentive structure makes veAIW3 a long-term value asset:

* **Revenue Sharing:** veAIW3 holders receive a portion of AIW3 protocol revenue, including transaction fees, treasury yields, etc.
* **Buyback Voting Power:** veAIW3 holders can vote on which strategy tokens or AIW3 tokens should be bought back, directly influencing market support.
* **Long-Term Boost:** The longer the lock-up, the more veAIW3 generated, resulting in greater governance power and higher dividend shares.
* **Ecosystem Stability Contribution:** By locking AIW3 long-term, veAIW3 holders reduce circulating supply, enhancing token price stability and ecosystem resilience.

This design ensures veAIW3 is not only a governance tool but also a **core mechanism binding user commitment to ecosystem prosperity**.There is no minimum veAIW3 requirement for participating in governance votes. However, to **initiate a new proposal**, a user must hold at least **2,500 veAIW3**.