VEO Creation Flow

Lucid supports multiple VEO types tailored to different liquidity strategies:

1. Strategic VEOs: Designed for long-term capital acquisition and ecosystem incentives. (e.g USDC, USDT or ETH)

2. TVL (Total Value Locked) VEOs: Used to attract liquidity providers by offering vested incentives. Driving liquidity inside of a lending market by only accepting the yield bearing token as a deposit token for the VEOs. (e.g. aUSDC from Aave.)

3. Liquidity VEOs: Helps bootstrap liquidity across different chains with time-based emissions. (e.g. achieving deep liquidity inside of LP pools in DEXs.)

Each VEO type can follow various strategies, including:

• Fixed-Price: Tokens are sold at a set price.

• Sequential Dutch: A pricing strategy where the bond price adjusts gradually over time based on demand, following a Dutch auction format. Unlike oracle-based pricing, this model operates independently of external price feeds, creating a self-contained market driven purely by supply and demand dynamics. The price typically starts high and decreases incrementally at set intervals until buyers step in. This structure enables natural price discovery, as participants decide when to enter based on perceived value and market competition. Sequential Dutch is ideal for protocols looking to foster an open, flexible market environment where price is determined organically through participant behavior, without relying on external oracles.

• Oracle-Fixed Pricing: This pricing model uses real-time data from an external oracle to determine the bond price, which is then fixed for the entire duration of the VEO. For example, the bond may be set to always offer a 5% discount relative to the market price at the time the VEO is launched. Users benefit from a consistent and transparent discount, making it easy to understand the value of the offering. This model is ideal for protocols seeking stable, predictable pricing and a straightforward user experience. It removes uncertainty around price fluctuations and encourages participation from users who prefer clear terms upfront.

• Oracle-Sequential Pricing: This is a dynamic pricing strategy where the bond price is tied to an external oracle and updated at regular intervals (e.g., daily) to reflect changes in market conditions. The bond price and discount level update at defined intervals (e.g., every 24 hours). Early users might access smaller discounts, while later users might get better terms—if the VEO hasn’t been filled. Oracle-Sequential pricing is ideal for protocols that want the VEO price to adapt with market conditions. It balances flexibility with fairness and is particularly effective for campaigns aiming to maximize participation and capital efficiency over time.The pricing mechanism follows a Dutch auction format.

  Dutch Auction Explained:

  In a Dutch auction, the price starts high and gradually decreases over time until a buyer chooses to purchase. This approach introduces price discovery, as buyers must decide whether to act early at a higher price or wait for a potential discount—risking that others may buy before them. In the context of Lucid’s VEOs, this model incentivizes early participation while still giving later entrants a chance to engage at fair market rates.

Overview

When configuring a VEO, you’ll be asked to choose a Vesting Type. There are two options:

Fixed Expiry

• The tokens purchased will unlock on a specific date & time.

• All users receive their vested tokens on the same end date, regardless of when they purchased.

• Ideal when the protocol wants to align all token unlocks to a specific timeline for strategic or liquidity reasons.

Fixed Term

• The vesting period begins individually for each buyer at the moment of their purchase.

• The unlock date varies per user based on when they bought the VEO.

• Best when the goal is to create rolling vesting timelines.

Linear Fixed Expiry

In this model, tokens vest continuously (every second) starting from the time of purchase by the user and continue until a fixed expiry date set by the project. All users who receive tokens under this schedule follow the same timeline, regardless of when their individual allocation is made.

• The expiry date is universal for all participants.

• If a user joins later, they still vest only until the fixed expiry date, resulting in a shorter vesting window. Even though the vesting period is shorter, more tokens vest during this period compared to someone who bought the same amount of VEOs at an earlier date.

• Vesting speed adjusts based on when the user joins, to ensure full vesting by the expiry date.

This model is ideal for scenarios where the project wants to align all recipients to a shared end date.

Linear Fixed Term

In this model, tokens vest continuously (every second) over a fixed duration (term) that starts when each individual user purchases. A vesting schedule is created when the user purchases the bond.

• Each user has a personalized vesting timeline starting from their allocation date.

• The vesting period lasts the same amount of time for everyone (e.g., 6 months), regardless of when they join.

• Useful when recipients are onboarded at different times, ensuring each gets a consistent vesting experience.

In Lucid’s VEO (Vested Emission Offering) creation interface, the Price Model section dynamically adapts based on the selected strategy, displaying specific configuration fields tailored to that pricing approach. Once a strategy is chosen, the relevant input fields appear automatically, and must be filled out accurately to ensure the VEO behaves as intended. This modular setup gives protocols the flexibility to align their offering with liquidity goals, market conditions, and incentive design. Below is a breakdown of each pricing model and the corresponding configuration fields.

Fixed-Price

• Overview: A simple, static model where tokens are sold at a fixed price throughout the entire duration of the VEO.

• Fields:

  • Initial Price: The constant price at which users will purchase the token. This value remains unchanged regardless of market activity.

• Use Case: Ideal for protocols seeking predictable and straightforward pricing for participants.

Sequential Dutch

• Overview: Implements a Dutch auction model where the price starts high and gradually decreases at fixed intervals until it reaches a minimum threshold or the VEO is filled. This mechanism allows natural price discovery based on buyer demand.

• Fields:

  • Initial Price: The starting price for the auction.

  • Minimum Price: The lowest allowable price that the auction can reach.

  • Debt Buffer (%): Additional margin factored into pricing to ensure sustainability of emissions. Click here to learn more about Debt Buffer.

• Use Case: Best suited for protocols that want to reward early buyers while still allowing for wider participation as price lowers over time.

Oracle Fixed

• Overview: Price is determined using a live oracle feed but remains constant during the VEO. A fixed discount is applied relative to the oracle price at the moment of market creation.

• Fields:

  • Fixed Discount (%): Discount applied to the oracle price.

  • Max Discount from Current (%): Safeguard to cap how far below the current price the discount can go.

• Use Case: Suitable for stable pricing environments or protocols that want to offer transparent, consistent discounts with oracle-based tracking.

Oracle Sequential

• Overview: Dynamic pricing strategy that updates the bond price periodically (e.g., daily) based on a live oracle feed. This allows the price to adjust over time in line with market conditions.

• Fields:

  • Base Discount (%): Starting discount applied to the oracle price.

  • Max Discount from Current (%): The maximum allowable discount from the live oracle price.

  • Target Interval Discount (%): Amount by which the discount will change at each interval.

• Use Case: Great for protocols seeking adaptive pricing that evolves with the market, encouraging timely participation across a campaign.