> 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.