> For the complete documentation index, see [llms.txt](https://docs.extrafi.io/extra_finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.extrafi.io/extra_finance/tokenomics/tokenomics-v1/ve-mechanism-and-utility.md).

# ve-Mechanism & Utility

### ve-Mechanism

<figure><img src="/files/QN9XCJgwfnqrgGNtzxey" alt=""><figcaption></figcaption></figure>

Extra Finance uses two tokens to manage its utility and governance:

* `$EXTRA` — ERC-20 utility token of the protocol
* `$veEXTRA` — ERC-20 governance token of the protocol

`$EXTRA` is used for rewarding liquidity providers through emissions.

`$veEXTRA` is used for governance. Any `$EXTRA` holder can vote-escrow their tokens and receive a `$veEXTRA` in exchange.

The lock period (also known as vote-escrowed period, hence the *ve* prefix) can be up to 1 year (52 weeks), following the linear relationship shown below:

* 100 `$EXTRA` locked for 52 weeks will become 100 `$veEXTRA`
* 100 `$EXTRA` locked for 13 weeks will become 25 `$veEXTRA`

The longer the vesting time, the higher the voting power (voting weight) and rewards the `$veEXTRA` holder receives.

### Governance

#### **Vote & Governance in the Community.**

`$veEXTRA`is the voting power in Extra Finance's on-chain governance process. Users could use it to initialize a proposal, or cast for/against community proposals.

### Utility

By holding `$veEXTRA`, users can unlock the following benefits and features:

#### **1. APR rewards, sourced from both protocol fees and `$EXTRA` token incentives.**

The protocol fee comprises various tokens collected into the treasury and is shared once per epoch. It is used to buy back `$EXTRA` tokens from the market and then distribute them to holders of `$veEXTRA` tokens.

A portion of the `$EXTRA` tokens allocated to the community will also be assigned to `$veEXTRA` token holders, subject to a specific emission plan.

At the end of each epoch, rewards will be collected for distribution.

#### **2. Unlock higher leverage for yield farming pools.**

#### **3. Gain access to lending pools with a high utilization rate.**

Lending pools may experience high demand and potential shortages when implementing leverage farming. However, holders of $veEXTRA will have the privilege to borrow from these pools.

#### **4. Priority to more coming features and benefits,** including:

* Advanced facilities including one-click position-rebalance tool.
* Automatic strategy vaults.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.extrafi.io/extra_finance/tokenomics/tokenomics-v1/ve-mechanism-and-utility.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.