Vested Emission Offerings (VEOs)

Lucid’s Vested Emission Offerings (VEOs) are a versatile solution for both protocol-owned liquidity programs and streamlined on-chain OTC transactions. By leveraging smart contracts, VEOs eliminate the need for cumbersome legal and custodial arrangements, making it simpler for both community-driven liquidity initiatives and large institutional deals.

Protocol-Owned Liquidity (POL) with VEOs

Traditionally known as liquidity mining, the protocol-owned liquidity model allows ecosystems to build and control their own liquidity through VEOs. Foundations can offer vested tokens to participants who provide liquidity, ensuring that the ecosystem itself retains ownership and control. VEOs make this process seamless by automating the vesting and distribution of tokens, creating a sustainable and community-aligned liquidity base.

Unlike traditional liquidity mining, which typically retains just 3–5 % of emissions as long-term liquidity, VEOs recover over 90% post-program. Combined with protocol fee capture, net returns often exceed 100 % within ten months—giving protocols and chains a durable liquidity advantage while simultaneously preserving and growing their treasury.

On-Chain OTC Transactions with VEOs

In addition to POL, VEOs have become a cornerstone for executing on-chain OTC deals. By using VEOs, large funds and foundations can bypass the lengthy legal negotiations and custodial arrangements typically required for large transactions. Instead, everything is handled trustlessly through smart contracts, enabling quick and secure settlement.

Key Benefits of VEOs for Both Use Cases:

• Automated and Efficient: Whether for POL or OTC, VEOs automate the entire vesting and distribution process, reducing manual overhead.

• Legal and Custodial Simplicity: VEOs remove the need for extensive legal contracts and third-party custodians. All terms are encoded in the smart contract, providing a clear and automated framework.

• Versatility for Large Deals: With major funds and foundations now using VEOs for large-scale OTC deals, the platform is proving its capability to handle both community-focused and institutional-grade transactions seamlessly.

In summary, VEOs provide a dual-use powerhouse for ecosystems, allowing them to build protocol-owned liquidity or execute large OTC deals with the same efficient and transparent infrastructure.

Click here to jump directly to the VEO Purchase Flow Guide

Click here to jump directly to the VEO Creation Flow Guide.

Types of VEOs and Strategies in Lucid

Lucid supports multiple VEO formats, each designed to help protocols attract and retain long-term liquidity — all in exchange for discounted governance tokens that are vested over time:

1. Strategic Asset VEOs: These VEOs accept blue-chip assets like USDC, USDT, or ETH. Participants bond these strategic assets directly, and in return receive the protocol’s governance tokens at a discount. Ideal for projects looking to build a reserve of stable or high-value assets. (e.g USDC, USDT or ETH)

2. Liquidity VEOs: Integrated with Steer Protocol, these VEOs direct liquidity into actively managed LP positions. Users deposit token pairs to receive LP tokens, which are then bonded in exchange for discounted governance tokens. (e.g. achieving deep liquidity inside of LP pools in DEXs.)

3. TVL VEOs: Designed to drive capital into on-chain DeFi contracts, such as lending markets or vaults. Users deposit funds into the protocol (e.g. aUSDC from Aave.), and in return, receive discounted governance tokens.

Regardless of type, the outcome is the same: participants contribute capital or liquidity, and in exchange, receive vested governance tokens at a discount — aligning incentives and supporting protocol growth.

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

Strategy	Pricing Source	Price Behavior	Oracle Dependency	Best For	Buyer Experience
Fixed-Price	Manually set by protocol	Remains constant for the entire VEO duration	❌ No	Simple, predictable pricing structures	Clear and consistent pricing with no changes
Sequential Dutch	Internal demand-based logic	Starts high and decreases over time (Dutch auction format)	❌ No	Open markets that rely on supply/demand for price discovery	Incentivizes early participation; price discovery through user behavior
Oracle-Fixed	External oracle	Pegged to oracle at launch, then fixed	✅ Yes	Stable pricing with a consistent discount off market price	Transparent discount; ideal for users who prefer fixed terms
Oracle-Sequential	External oracle	Adjusts dynamically (e.g., every 24h) based on updated oracle price	✅ Yes	Markets that need adaptive pricing to reflect changing conditions	Discount and price vary over time; balances fairness and flexibility

Example of How VEOs Work:

Discount: 10%

You contribute: $100 in USDT or LP tokens

This means you receive: $100 ÷ (1 - 0.10) = $111.11 worth of governance tokens.

Your $100 goes to the project’s treasury (non-refundable), and the $111.11 worth of tokens are linearly vested over time.

How to Access VEOs

1. Locate the VEOs card on the homepage (far right).

2. Click the Open → button.

After clicking “Open” from the Lucid homepage, users are taken to the Vested Emission Offerings (VEOs) Marketplace, which provides a comprehensive overview of all active and past VEOs across various protocols.

Marketplace Metrics

At the top of the page, users can view three key metrics:

• Total Value Locked (TVL): Displays the cumulative dollar value of all tokens currently participating in VEOs.

• Total VEOs: The number of active and closed VEO markets.

• Unique Buyers: The number of distinct wallet addresses that have participated in any VEO.

View Modes

Users can toggle between:

• VEOs view: See all available VEOs directly.

• Organisations view: Explore VEOs grouped by issuing protocol or organisation.

VEOs view

Organisations View

Filters and Sorting Options

To streamline navigation and discovery, the interface offers several filters:

• Search Bar: Filter by VEO name or issuing protocol.

• Status: Filter VEOs by “Live” or “Closed.”

• VEO Type: Filter by Strategic, Liquidity, or TVL.

• Price Strategy: View markets by pricing mechanisms (e.g., Static, Dynamic, Oracle).

• Sorting: Organise listings by Highest Discounts, Lowest Discounts.

---

Managing your VEOs

Clicking the “My VEOs” button in the top-right corner of the VEOs main page opens a personalized dashboard where users can monitor their participation in Vested Emission Offerings (VEOs).

You can reach the same dashboard by clicking the “Dashboard” button located in the left-hand sidebar or the "My VEOs" button in the top of the main VEOs page.

Sidebar Navigation explained

Access different sections such as Organisations, Bridge, VEOs and Dashboard using the sidebar menu.

---

Key Sections of the Organisation VEO Page

Organisation Profile

• Supported Chains – Indicates which blockchain networks this organisation operates on.

• Creation Date – Shows when the organisation was added to Lucid.

• Description – A brief summary of the organisation’s role and its involvement in DeFi.

• Create VEO – Allows the organisation’s team to launch new VEO markets. Click here for step by step instructions on how to Create VEOs.

• Visit Website – Directs users to the protocol’s official website.

Dashboard Overview

The dashboard provides real-time insights into the organisation’s VEO activity:

• Total Value Locked (TVL): The total amount of assets locked across all active VEOs within this organisation.

• Total VEOs: The number of VEO markets created by this organisation.

• Unique Bonders: The total number of distinct addresses that have participated in the organisation’s VEOs.

Value Locked Chart displays a visual representation of the liquidity distribution across different VEO types:

• Total Value Locked (Blue)

• Liquidity VEOs (Green)

• TVL VEOs (Orange)

• Strategic Asset VEOs (Yellow)

Users can toggle between different timeframes (1D, 7D, or All) to track changes in value locked over time.

“Available Markets” section of the VEOs (Vested Emission Offerings) page, displays where users can browse live VEO markets and choose which ones to participate in.

Key Components:

• Name: Displays the issuing organization (e.g., Lucid Labs) and the chain the VEO is deployed on (e.g., Polygon).

• Type: Indicates the type of VEO (e.g., TVL) and the strategy used:

  • Oracle Fixed: Price is dynamically calculated via an oracle but fixed at time of purchase.

  • Fixed-Price: A constant price set by the issuer.

  • Also shows the vesting method, such as Standard or Linear.

• Price: Shows the current token price and any applicable discount (e.g., -7%). Below it, the price strategy is labeled (e.g., Static).

• Capacity: Indicates how much of the VEO’s total allocation has been filled (e.g., 1%, 5%).

• Vesting: Shows the duration of the vesting period (e.g., 5 Days) and the exact vesting end date.

• Actions: Click the View button to open a detailed page for that specific VEO and proceed with purchasing.

Filters:

The top-right filters allow you to sort and refine the list by:

• VEO status (Live, Closed)

• VEO type (Liquidity, TVL, Strategic)

• Price strategy (Static, Dynamic, Oracle-based)

• Discount level