# The ve80/20 System

Curve's vote escrow (veCRV) model revolutionized staking incentives in DeFi protocols, notably enhancing governance participation. However, a downside effect appeared: locked tokens were effectively removed from circulation, leading to liquidity pool inefficiencies, such as reduced liquidity, high slippage, and increased volatility in the governance token's pool.

The model encouraged holders to lock tokens for extended periods to gain higher voting power, resulting in even more liquidity pool inefficiencies for longer. This demanded protocols to introduce costly and ineffective incentive programs to sustain the pools, ultimately proving to be negative in the long run.

To address this challenge, the ve80/20 model was created. Under this method, users lock LP tokens from an 80/20 pool (e.g., ZRS/ETH) to acquire the veToken, such as veZRS.

In this approach, liquidity pools receive additional liquidity when users seek voting power, as they are required to lock an LP token rather than solely the governance token. This effectively solves the inefficiency problem within liquidity pools seen in the ve(3,3) model.

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