Claim Layer3 rewards
To lock tokens usually means they can’t be traded or used for a specific period of time. Locking tokens can help projects maintain more stable long-term value of assets, and users usually receive rewards when they contribute their tokens to a locker. Some lockers allow you to withdraw after a window of time passes, and others ask you to lock your tokens forever in exchange for long term rewards.
In many cases, locker contracts are set to reward users based on the amount of time they lock their tokens for. This means, users that lock their tokens for longer periods of time, tend to receive a more attractive APY, and vice versa (Curve Finance is the most notable example of protocols utilizing this model).
It’s really important that you understand the time constraints of a locker before depositing any assets. Like most things in blockchain, once you hit send, it can’t be undone.
Hermes, a new DeFi protocol in the Metis Marathon, offers lockers that distribute governance rewards. Currently, users can lock their HERMES tokens in exchange for a governance NFT. The more tokens locked, and the longer they are locked, the more governance power is awarded.
Voting power on Hermes allows users to choose which liquidity pools should receive emissions and receive the respective pools’ trading fees in return. Projects can bribe NFT holders to vote for their pools to receive emissions, so there’s incentive to hold and lock tokens to participate in governance.
In the next version of Hermes, coming soon, lockers will lock assets forever — and users will receive bHERMES (burned) tokens in exchange for their HERMES tokens. bHERMES can transferred, but in addition to the voting power, veHERMES holders earn a 100% share of the trading fees generated by the exchange. The more bHERMES you have, the more voting power you have, and subsequently the greater the share of trading fees you receive as emissions.
But wait — forever? I have to lock my tokens forever? Not quite. If you don’t want to hold bHERMES anymore, trade them for HERMES and use them as you like.
Stay tuned for more on the Hermes protocol, and if you have any questions, hit us up on Twitter!
