💥oTokenomics

Introduction

oTokenomics is a relatively new concept in DeFi, and especially new to ve(3,3) DEXs. With oTokenomics, Retro can ensure that veRETRO holders are being rewarded with maximum incentives, while at the same time discouraging mercenary farm and dump strategies on the DEX.

oTokenomics is a fundamental shift in the way that liquidity is incentivized, and shifts value from farmers looking to extract profits at Retro's expense to loyal stakeholders of the protocol.

$oRETRO Emissions

Instead of traditional emissions in the form of $RETRO that could be immediately dumped into the market, liquidity is incentivized through $oRETRO, which is the the option call version of $RETRO. Essentially, someone with $oRETRO in their possession can do three things with it:

1.) Exercise the option and purchase $RETRO 1:1 at a discount with $CASH

• example - current $oRETRO discount is 70%. Farmer A has 100 $oRETRO tokens from emissions (let's say market price of $RETRO is $1 for this example). He decides to exercise his option and redeem his $oRETRO for $RETRO. He will pay $30 in $CASH tokens, and receive 100 $RETRO.

When exercising an $oRETRO option, the “discount” paid upfront by a user is split 75/25.

75% goes to bribe the top fee earning pools, which veRETRO holders receive by voting. 25% goes to the isolated Overcollateralization Treasury, which boosts yields on $CASH APR’s as described earlier in these documents.

2.) Convert $oRETRO to max locked veRETRO 1:1

If the user decides to convert their $oRETRO to veRETRO, there is no fee to do so. This entitles the user to begin voting with their veRETRO and earn massive real yields as a result of Retro's efficient fee and bribe generation mechanisms.

3.) Sell $oRETRO through the $oRETRO/$RETRO LP on Retro

The user can sell their $oRETRO on the market to avoid paying the discounted fee. Should the $oRETRO peg fall below the discount price, it would behoove the user to excercise their option instead.

Assuming $oRETRO price will hover around the discounted option rate, this also opens up an avenue to acquire discounted veRETRO, as $oRETRO could be purchased on the market at a lower price and locked to veRETRO for no fee.