veTHL is Coming to Mainnet!

Thala Labs
6 min readAug 22, 2023

THL holders and THL/MOD liquidity providers can lock their holdings for a range of potential benefits with veTHL.

TLDR: The long-awaited veTHL is finally ready for launch, alongside escrowed THL and an emissions cut, all set for 08/23/2023. This means that:

  • THL holders and THL/MOD liquidity providers on ThalaSwap can access a myriad of benefits, including share of esTHL penalties, future governance rights, potential airdrops, and more.
  • THL liquidity providers and stability providers will vest their liquidity mining rewards as esTHL, and should claim their existing rewards before the protocol upgrade.

Vote-Escrow Mechanics

We’re excited to finally announce that Thala’s vote-escrow token (veTHL) will be shipping to Aptos mainnet this Wednesday. A token model first pioneered by Curve Finance and adopted across hundreds of DeFi protocols, vote-escrow tokenomics rewards long-term aligned token holders and provides value capture at a protocol level.

At launch, users will be able to acquire veTHL by either locking their THL or THL-MOD liquidity pool tokens. Voting power is calculated as a function of the user’s deposit value and duration. veTHL lock duration ranges from a minimum duration of 2 weeks to a maximum of 52 weeks, and voting power is directly proportional to max-locked (52 weeks) THL.

To support the added optionality of locking either THL or THL-MOD, Thala is introducing a composable ve-token standard on Aptos, in which 1 ve-token type is mapped to 2 distinct asset types. This means that users who do not want to incur potential impermanent loss (IL) or provide liquidity can easily opt out and single-side lock their THL.

For LPT lockers, please note that the THL-MOD position must be unstaked from the farming contract to interact with the vote-escrow module. However, locked LPT positions will still continue to accrue 100% of their pro-rata THL emissions on a weekly basis.

esTHL Mechanics and Emissions Cut

escrowed THL (esTHL) will also launch simultaneously with Thala’s vote-escrow module. While inflationary emissions has allowed Thala to bootstrap the initial liquidity and TVL, there’s a need to transition to a more sustainable liquidity mining model. With the start of a new emissions epoch on August 21st, 2023, global THL emissions are reduced by 10%.

THL emissions across all of Thala’s products will now require vesting in the form of esTHL, an illiquid version of accrued THL rewards. To convert escrowed THL to THL, users must vest for a duration of 30 days, but can choose to exit early at a penalty. This penalty decreases linearly from 80% to 0%.

On a weekly basis, the penalized THL from early esTHL exits will be redirected and distributed to Thala stakeholders for long-term alignment. 50% of the penalized THL will be distributed to veTHL lockers on a weekly basis and 25% will be sent to the Thala treasury multisig wallet, with the remainder being burned and permanently taken out of supply. These parameters are changeable via governance.

With the release of Phase 2 outlined by the Thala V2 Medium post, we’re excited to share that we’ve already begun preparations to bring Parliament, the RWA module and Thala LSD to Aptos mainnet for Q4 of 2023.

Thala is a decentralized finance protocol powered by the Move language, enabling seamless borrowing of a decentralized, over-collateralized stablecoin in Move Dollar and capital-efficient liquidity provisioning via a rebalancing AMM on the Aptos blockchain.

Website: http://thala.fi/

Discord: https://discord.gg/thala

Twitter: http://twitter.com/thalalabs

Documentation: https://docs.thala.fi

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Thala Labs

Thala is a decentralized finance protocol on the Aptos blockchain.