# Introduction
An overview and history of the KuSwap Ecosystem
## What is KuSwap?
KuSwap is the Ultimate Liquidity Solution for the KuCoin Community Chain (KCC). It is decentralized and permissionless, allowing anybody to participate in decentralized finance (DeFi) from anywhere in the world.
KuSwap is an ecosystem within the larger ecosystem of KCC. It consists of a decentralized exchange, a launchpad, a truly decentralized NFT marketplace, and most importantly, a governance system that allows the community to take part in the development and administration of KuSwap.
## Components of the KuSwap Platform
{% tabs %}
{% tab title="DEX" %}
The KuSwap decentralized exchange (DEX) is the heart of the KuSwap platform. It enables users to trade and swap tokens, while also providing opportunities to earn rewards by:
1. Providing Liquidity and Yield Farming
2. Holding governance tokens (veKUS)
3. Trading Battles
4. Participating in governance
5. Community Activities
{% endtab %}
{% tab title="Launchpad" %}
The KuSwap Launchpad is a feature within the KuSwap Platform that allows users to participate in new token launches. By holding veKUS tokens, users can access exclusive token sales, giving them an opportunity to invest early in promising projects.
{% endtab %}
{% tab title="NFT Marketplace" %}
The KuSwap NFT Marketplace is a platform where users can buy, sell, and trade non-fungible tokens (NFTs). This feature provides an avenue for users to explore and participate in the growing world of digital art, collectibles, and virtual assets.
{% endtab %}
{% tab title="KUSPlay" %}
Through these platforms, a vast array of utilities can be found in the KuSwap token, thereby making it an invaluable asset to users of crypto and Decentralized Finance.
{% endtab %}
{% tab title="Governance" %}
Holding the governance token veKUS provides several benefits including
1. Participate in Emissions Voting
2. Earning Fees from the DEX
3. Earning Bribes from the DEX
4. Participate in Launchpad
{% endtab %}
{% endtabs %}
***
*KuSwap was crowdfunded by the KCC community and since then has stood tall as an unrivaled leader in the protocol developments on KCC, spearheading the forefront of DeFi advancements and bringing the very best developments to the KCC ecosystem.*
*KuSwap brought many firsts to KCC such as*
* *Decentralized Exchange*
* *NFTs and Marketplace*
* *Launchpad*
* *Trading Battles*
* *Governance*
*On July-August 2023, After months of discussion and gathering community input, KuSwap migrated its community, holders and liquidity to a new protocol that aligns incentives and gives more power and benefits to KUS holders.*
# Convert KUS to KUSv3
The Convertor allows users to seamlessly upgrade their KUS tokens to KUSv3 tokens. This is a 1:1 conversion, meaning you will receive exactly one KUSv3 token for every KUS token you convert.
## How to convert?
**Visit** [**https://app.kuswap.finance/#/migrate**](https://app.kuswap.finance/#/migrate)
1. **Approve**: Allow the KuSwap v3 smart contract to interact with your KUS tokens.
2. **Convert**: Initiate the conversion transaction in the KuSwap v3 interface.
3. **Receive**: Automatically receive KUSv3 tokens in your wallet upon successful transaction confirmation.
#### Requirements
* Wallet holding KUS tokens.
* Sufficient gas fees for the conversion transaction.
#### Notes
* The conversion is irreversible; you cannot convert KUSv3 back to KUS.
* The conversion takes place in the same transaction, ensuring immediate token upgrade.
#### Fees
No additional fees are incurred during the conversion process except for the gas fees required to facilitate the transaction on-chain.
# Migrating v2 LP Tokens to v3
Migrate your liquidity from KuSwap.finance to v3.KuSwap.finance
## Step 1
Go to KuSwap Migration page:
**Select the LP pair** you want to withdraw and click on "Withdraw LP"
### Step 2
Click on "Remove LP from V2", and remove your LP tokens from V2
{% hint style="warning" %}
### Convert your KUS to KUSv3 [Convert KUS to KUSv3](/convert-kus-to-kusv3)
{% endhint %}
## Step 3
Click on "Add LP to v3" or click [here](https://v3.kuswap.finance/liquidity)
## Migrating v2 LP Tokens to v3
### Step 1: Convert KCS to wKCS
Since KUSv3 is paired with WKCS, you will have to wrap your KCS before adding liquidity.
**Select KCS to WKCS on the** [**swap page** ](https://v3.kuswap.finance/swap)
**Follow the instructions to wrap your KCS tokens into wKCS.**
### Step 2: Deposit and Stake LP Tokens
1. Access the "[Liquidity](https://v3.kuswap.finance/liquidity)" section on the platform.\
2. Click on the "[Manage](https://v3.kuswap.finance/liquidity/0x6bc7279d1dfcfcb968a8389c7fc642ae7728ad3d/0x7b7299837aadbc9ba86cbe1d3b6f0c2d15cd9129)" button.
3. Input the amount of KUSv3 tokens you wish to deposit into the LP.
4. Click on the "Deposit and Stake" button to finalize the transaction.
After completion, navigate back to the "Manage" section in the "Liquidity" area to verify that your staked amount is displayed correctly.
For any technical issues or further questions, you can open support ticket here:
# Protocol Overview
A high-level overview of the KuSwap Decentralized Exchange
## KuSwap v3 in a Nutshell
KuSwap has consistently demonstrated its ability to adapt to the dynamic challenges of the DeFi development landscape. The latest manifestation of this adaptability is KuSwap v3, a platform that integrates governance and incentive alignment to make it the most efficient and low-cost platform.
## Incentivization of Liquidity
{% hint style="info" %}
**CHALLENGES ADDRESSED**
* Conventional DEXes have proved costly to maintain, resulting to emissions being sold off.
* Not all pairs require huge amounts of liquidity at all times.
* Independent projects have no way of incentivizing provision of their own liquidity.
{% endhint %}
{% hint style="success" %}
**SOLUTION**
KuSwap v3 utilizes governance mechanisms to regulate the emissions of the platform. This is achieved by adjusting the emissions through the governance token (veKUS) and aligning incentives by giving 100% of the fees and bribes to veKUS holders.
{% endhint %}
## The KuSwap v3 Economy
The KuSwap Economy aligns the incentives among the different participants in the platform: The KuSwap DEX, Liquidity Providers, veKUS Holders, Traders, and other protocols.
Let's Dive Deep from the perspective of each one.
### KuSwap v3 - $KUSv3
1. KuSwap provides emissions to Liquidity providers based on the gauge voting done by veKUS Holders.
2. KuSwap provides KUSv3 tokens to veKUS Holders in the form of rebases (Rebase tokens add to their locked amount).
3. KuSwap enjoys a higher liquidity from liquidity providers and due to liquidity incentivization and bribes.
### Liquidity Providers
1. Liquidity providers provide liquidity to the platform by depositing liquidity in Liquidity Pools (LP). They may also provide liquidity to other protocols and projects.
2. The liquidity they provide makes low slippage swapping possible.
3. Liquidity Providers receive KUS.
4. Liquidity Providers can lock their KUS earnings into veKUS and vote for their own pools to get a higher share of emissions.
### veKUS
1. KUSv3 emissions can be locked to veKUS.
2. veKUS decides the amount of emissions each pool receives through gauge voting.
3. veKUS receives the following benefits:
1. receives fees from the pools they vote for
2. receives bribes to the pools they vote for
3. receives rebase
`veKUS` holders receive a rebase proportional to epoch LP emissions and the ratio of `veKUS` to `veKUS` supply, thus reducing vote power dilution for `veKUS`!
The weekly rebase amount is calculated with the following formula:
> (veKUS.totalSupply ÷ KUSv3.totalsupply)³ × 0.5 × Emissions
Since veKUS receives the fees and bribes for the pools they vote for, it makes sense that they vote for the pools that are actually being used for swapping or for pools that have bribe offers.
{% hint style="info" %}
**BRIBES**\
Bribes are additional sources of revenue for veKUS holders. Since veKUS holders decide which pools receives the emissions, 3rd part projects can offer bribes so that veKUS votes for them.
{% endhint %}
### Protocols
1. Protocols can offer bribes to veKUS holders.
2. veKUS holders will then vote for the protocols to get the bribes.
3. veKUS votes will give KUS emissions to the liquidity providers of the protocol.
4. The Protocol receives liquidity due to incentivization.
### Traders
1. Since liquidity is incentivized, traders enjoy a lower slippage.
2. The fees that traders pay are distributed to veKUS Holders.
## Economy Design
1. Since the swap fees go to veKUS holders, they are incentivized to properly direct the emissions to the LPs that are actually being used for swaps. This makes the platform capital efficient.
2. Since the bribes go to veKUS holders, 3rd party projects are incentivized to offer bribes to veKUS holders.
3. LPs are incentivized to lock their KUS earnings into veKUS so that they can vote for the pools they are providing for and earn more KUS.
4. Since all the entities involved (Liquidity Providers, Core Developers, KUS holders, and 3rd party projects) are incentivized to lock into veKUS, the major earnings from the platform is expected to come from fees and bribes, a.k.a. RealYield.
### Velodromes Changes: Tying Rewards with Emissions
* Voters to make only one "active" voting decision (i.e. `Voter.vote()`, `Voter.reset()`) every epoch.
* Additionally, bribes from fees (*internal*) and external sources (*external*) are treated slightly different. Internal bribes are extracted from each swap and are converted to external bribes for that specific pool. External bribes are rewarded *per epoch* and are claimable only after the next epoch starts, when all votes are tallied. This means that a bribe sent at the last minute of an epoch will accrue to all voters of that epoch, and be claimable once the epoch flips. *(This is no longer valid on Velocimeter.)*
### Further Velodrome adopted features
**In Solidly, protocol emissions decayed too quickly, leading to minimal incentives for late entrants.** Obviously early adopters should be rewarded for the risks they're taking, but we observed that the emissions decayed too quickly in the Solidly model. As a result, we made a few small tweaks to ensure that while early adopters would still be rewarded, the protocol would still be an attractive opportunity for future protocols.
* First, we modified the emissions growth function to
> (veKUS.totalSupply ÷ KUSv3.totalsupply)³ × 0.5 × Emissions
* Second, there is no negative voting.
* Third, there is no emissions "boost" for voters.
* Fourth, the initial distribution has been carefully selected to include partner protocols that were felt would bring their own types of unique value to the ecosystem.
Here is a link to [Velodrome Finance 🚴♀️💨🌈](https://app.velodrome.finance/)
# Liquidity Pools
Liquidity Pools are the lifeblood of the KuSwap DEX, enabling users to swap tokens in a secure, permissionless, and decentralized environment, with very low fees and low slippage.
{% hint style="info" %}
**SLIPPAGE**
Slippage is the difference between the current market price of the asset being traded and the price at which the trades are executed. Slippage is inherent on constant function market makers such as KuSwap. Lower slippage equates to a more accurate trade price execution.
{% endhint %}
In order for KuSwap to be able to cater to every type of liqudity, we have implemented 2 types of liquidity pools: Stable and Volatile.
## Stable Pools
Stable pools are for assets that have little or negligible volatility, such as stable coins. It is essential that the formula for the trade execution in these pools are different from the volatile pools in order to allow for very low slippage, even in the cases where very high volume of trades happen.
The formula that KuSwap uses for stable pools is:
$$
x³y + y³x ≥ k
$$
## Volatile Pools
Volatile pools, as the name suggests, are for assets that can experience high levels of volatility from time to time. These pools use the generic formula of AMMs:
$$
x × y ≥ k
$$
## Fees Structure
The following fee structure is applicable for various trading pairs:
* For stablecoin pools, a nominal fee of 0.03% is charged on each trade.
* For volatile asset pairs, the trading fee is set at 0.3%.
These fees are retained in the native tokens involved in the respective trade (e.g., trading between KUSv3 and KCS will result in fees stored in KUSv3 and KCS).
Please note, the maximum trading fee that can be applied across all pairs is capped at 0.5%, offering a secure trading environment.
# Bribes
## Why Bribe?
In most cases, a partner project will be the entity that is bribing. However, this doesn't have to be the case. Any user that wishes can create a bribe to incentivize the voting for any pair that has a gauge. KuSwap will even use a portion of their `KUSV3` earned every week to bribe select pools. Bribing voters who vote to direct emissions of oKUSv3 can significantly increase oKUSv3 rewards to the pool that receives the bribe.
#### Benefits for Bribers
1. **Trading Fees and Bribes Back**: Holding oKUSv3 allows you to reclaim trading fees and bribes.
2. **Claim** oKUSv3 **Emissions**: Bribers with protocol-owned liquidity can claim oKUSv3 emissions.
### Claiming
Once an epoch flips, any bribe that are owed to a voter, are immediately claimable. To claim simply go to the [Rewards page](https://v3.kuswap.finance/rewards), choose the NFT that voted, and your claimable bribes will appear.
## Auto Bribe
To make bribing more easy for projects, they can request an autoBribe contract to be created. Auto Bribe allows projects to deposit a selection of tokens in different quantities and designate a period over which these bribes will be dispersed.
## Distributing the Auto Bribes
Any chain to a blockchain required that gas is spent and a transaction is called. There are not automatic changes. Usually these sort of needs are dealt with by bots (aka keepers) that have gas money and call functions for projects at some set times.
With the autoBribe contracts, instead, we decided to give this opportunity to the community. On the [Bribe page](https://v3.kuswap.finance/bribe), you will find a series of buttons. On a weekly basis, these buttons will become active for the community to call and send project bribes. They can only be called once each! To compensate individually that successfully call these function. 0.5% of the bribe amount will be gifted to the caller.\
\
# Tokenomics
The values outlined in this section have undergone extensive deliberation within the KuSwap community and have been formally [approved through the voting process by KUSGOV](https://snapshot.org/#/kusgov.eth/proposal/0x42a544a2b7dbe4a9914d75b8f6afb799024490ae2faa7226f41a9cd8daa93670).
### A. Initial Supply Distribution
The initial supply of KUS tokens in KuSwap v3 (KUSv3) will be set at 36,920,000\*. This allocation is designed to cover the following:
1. **Existing Holders (32,000,000 KUS or 86.67% of the initial supply)\***\
A. Migration of Existing KUS Holders\
B. Migration of Existing KUSGOV Holders\
C. Migration of KUS LP Pairs
2. **Team: (2,520,200 KUS or 6.83% of the initial supply)**
3. **Holder Bonus Pool (369,200 KUS or 1% of the initial supply)**\
KUS Holders who migrate early will receive more rewards than those who do it later. The process will be detailed in Part 3: Migration Strategy.
4. **Airdrop to KUSGOV Holders (738,400 KUS or 2% of the initial supply)** Tokens will be airdropped to KUSGOV holders who lock into KUSGOV before the snapshot date. The details will be announced in Part 3: Migration Strategy.
5. **Airdrop to Early KUS LPs (553,800 KUS or 1.5% of the initial supply)** Tokens allocated for Liquidity Providers. The details will be announced in Part 3: Migration Strategy.
6. **Airdrop to KUSFOX and KUSFOXES Holders (369,200 KUS or 1% of the initial supply)**
7. **Airdrop to Migration Community Activities (369,200 KUS or 1% of the initial supply)**
### B. Emissions Allocation
In KuSwap v3, the emissions will be distributed as follows:
* LP Rewards and Rebase (88%)
* Team (9%)
* Marketing: (3%)
### C. Emissions Decay
Decay: To maintain a sustainable emission model, a decay of 1% will occur at the end of every epoch (week), gradually reducing the emission rate over time.
### D. Maximum Supply and Minting Governance
The maximum supply of KUSv3 tokens in KuSwap v3 is set at 47 million. However, veKUS holders will have the authority to decide whether to mint additional tokens for purposes of increasing emissions or expanding to other chains. Any minting beyond the 47 million supply will require a governance voting process and will be subject to a 72-hour timelock, ensuring transparency and community consensus in decision-making.
## Protocol Regulation
KUSv3 of KuSwap v3 has three tokens available to regulate the system.
* `oKUSv3` — Reward token for LPs. Can be redeemed any time @ a discount on market price of `KUSv3` via redemption.
* `KUSv3` — ERC-20 liquid token with max supply.
* `veKUS` — ERC-721 governance token in the form of an NFT (non-fungible token). Votes to direct emissions, earns fees, bribes & `oKUSv3` redemption funds + redemption fees.
`oKUSv3` is used for rewarding liquidity providers through emissions. Its option mechanism provides sustainable funding for the protocol and support for the `KUSv3` market. An in-depth explanation of all redemption options is here [oKUS](/okus)
`veKUS` is used for governance. Any `KUSv3` holder can vote-escrow their tokens and receive `veKUS` (also known as a veNFT) in exchange. Additional tokens can be added to the `veKUS` NFT at any time.
The lock period (also known as vote-escrowed period, hence the *ve* prefix) can be up to 1 years, following the linear relationship shown below:
* 100 `KUSv3` locked for 1 year will become 100 `veKUS`
* 100 `KUSv3` locked for 3 months will become 25 `veKUS`
The longer the vesting time, the higher the voting power (voting weight) and rewards the `veKUS` holder receives.
### ve(3,3) Mechanics
KuSwap v3 mechanics reflect a combination of two DeFi concepts:
* Vote-Escrow — first introduced by Curve to strengthen incentives for long-term token holders
* Staking/Rebasing/Bonding or (3,3) game theory — designed by Olympus DAO
Combined, the *ve(3,3)* mechanism rewards behaviors correlated with KuSwap v3's success, such as liquidity provision and long-term token holding. Liquidity providers receive `KUSv3` emissions, and `veKUS` holders receive protocol fees, bribes, rebases, and governance power.
### Gauge Voting
`veKUS` holders decide which liquidity pools receive emissions in a given epoch by voting on their preferred liquidity pool *gauges*. `KUSv3` emissions will be distributed proportionally to the total votes a liquidity pool receives.
In return, voters receive 100% of the trading fees and bribes collected through the liquidity pool they vote for.
More information on voting can be found here
[veKUS Voting](/vekus-voting)
***
*\*These figures reflect the approved proposal as it appears on the medium article and snapshot voting. However, due to unforeseen delays, the timeline of the migration was moved and the actual circulating supply at the time the farms were stopped was 34,451,261 KUS. Hence, the initial supply was increased by 2,451,261 KUS in order to make sure to have enough supply for the migrators.*
# oKUS
KuSwap v3's oKUSv3 is a new options token that helps to reduce sell pressure on the native KUSv3 token. It is earned by liquidity providers (LPs) who provide liquidity to the KUSv3-wKCS pool.
oKUSv3 can be redeemed for KCS at a discount, or it can be locked up for a period of time as veKUS. veKUS is the governance token that allows holders to vote on the distribution of emissions, as well as receive weekly bribes and fees.
**There are three main options for LPs who earn oKUSv3:**
* KUSv3-wKCS LP Lock Option: This option allows LPs to lock their oKUSv3 rewards for a period of time. During this time, the oKUSv3 rewards will be compounded back into the KUSv3-wKCS pool, earning the LP additional oKUSv3 and wKCS.
* veKUS Option: This option allows LPs to redeem their oKUSv3 rewards for veKUS. veKUS is a governance token that allows holders to vote on the distribution of emissions.
* KUSv3 Option: This option allows LPs to sell their oKUSv3 rewards for KUSv3 at a discount. This option allows LPs to take advantage of the discount on KUSv3 and sell their oKUSv3 rewards for a profit.
### Benefits of oKUSv3
The introduction of oKUSv3 has a number of benefits, including: Reduced sell pressure: oKUSv3 can be redeemed for KUSv3 at a discount, which reduces the sell pressure on the native KCS token. Increased liquidity: The KUSv3-wKCS pool will be more liquid as a result of oKUSv3, as LPs will be incentivized to lock their oKUSv3 rewards in the pool. More sustainable APRs: The KUSv3-wKCS pool will be able to offer more sustainable APRs as a result of oKUSv3, as the pool will be more liquid and there will be less sell pressure on the native KUSv3 token.
### Practical Examples
Let's illustrate this mechanism with another example. Say the price of KUSv3 is $100, and there is a call option token oKUSv3. oKUSv3 gives its holder:
* a perpetual right to buy KUSv3 at 75% of the market price;
* a perpetual right to buy max locked veKUS at 10% or even 0% of the market price (currently 5% but 0 for example's sake);
* a perpetual right to LP into KUSv3/wKCS pool with a 40-80% discount. In this case holder is locked from withdrawing liquidity for x amount of time (7-60 days). When x amount of time passes the holder is allowed to initiate withdrawal.
The protocol issues 1 oKUSv3 to a farmer Alice, who immediately exercises the option to buy 1 KUSv3 for $75 and sells it on a DEX for $100. The tally of gains & losses are as follows:
* The protocol: -1 KUSv3, +$75
* The farmer Alice: +$25
* The DEX LPs: +1 KUSv3, -$100
Compare this to second possible choice of Alice (veKUS):
* The protocol: -1 veKUS
* The farmer Alice: +$100 worth of veKUS max locked (1 year) giving a right to claim voting bribes and fees
* The DEX LPs: 0 change
Compare this to third possible choice of Alice (KUSv3/wKCS LP):
* The protocol: 0 change
* The farmer Alice: +100$ worth of KUSv3/wKCS LP receiving LP rewards ino KUSv3 AND wKCS claimed from people who choose to redeem oKUSv3 immediately.
* The DEX LPs: +1 KUSv3/wKCS, +100$
We have the following observations:
Reallocation of value: Using oKUSv3 instead of KUSv3 as the reward token effectively transfers gains from the mercenary farmers and notorious dumping bandits to those invested in the protocol's success who see long term value in earning passive income from veKUS.
Trading off incentivization efficiency for protocol tokens LP depth: In our example, for each KUSv3 token issued by the protocol, the farmer Alice can choose option 3 and provide liquidity for a fixed amount of time which is crucial for protocol long term sustainability.
This effectively creates a continuous token sale: instead of giving away tokens for free in regular liquidity mining, we turn incentivization into a continuous token sale with options to:
* Redeem into liquid KUSv3 with the lowest discount, partially returning extracted value to the protocol;
* To redeem into locked KUSv3 with the greatest discount, decreasing circulation of KUSv3 and reducing short-term selling pressure;
* To redeem into LP with a moderate discount and the ability to collect wKCS gained from those who chose option 1
### Conclusion
The introduction of oKUSv3 is a positive development for the KUSv3 ecosystem. oKUSv3 has the potential to reduce sell pressure on the native KUSv3 token, increase liquidity in the KUSv3-wKCS pool, and offer more sustainable APRs for retail & protocols.
### Key terms
* oKUSv3: A new token that is earned by LPs who provide liquidity to the oKUSv3-wKCS pool. oKUSv3 can be redeemed for KUSv3 at a discount, or it can be locked up for a period of time in order to earn veKUS.
* KUSv3: The native token of the KUSv3 ecosystem.
* veKUS: A governance token that allows holders to vote on the distribution of emissions and receive weekly bribes and fees.
* LP: A liquidity provider. An LP is someone who provides liquidity to a liquidity pool.
# Whitelisting
KuSwap supports permissionless liquidity pool. Initially, assets from migration will be automatically whitelisted. Later on partners can request whitelisting and community members can request to whitelist through governance.
## The KuSwap Council
Whitelisting is important in order to prevent bad actors from gaming the emission system.
The Kuswap Council will have the right to disable hostile gauges, in order to protect and support the ecosystem.
The Kuswap Council will initially consist of the Kuswap team and later on will invite prominent figures from within the KCC community.
# Protocol Revenue
## Protocol Revenue
An important part of any project is the ability to sustain it's costs. We have put a good amount of thought into making sure that the development team, and community has a sustainable source of revenue.
### Swap Fees
All trading fees from liquidity pools that don't have gauges will be sent to the `tank`. Once a gauge is created for a particular pool, this feature is disabled. These fees will be used at the discretion of the team to do various things, ie. KUSv3 token buybacks and burns, bribe various core pools, cover protocol and development costs.
### Protocol Owned Voting Power (POVP)
The voting power of protocol will be used to vote on various pool, but dominantly on `KUSv3:WKCS` or any core `KUSv3` pool. Bribes collected via voting on the `KUSv3` pools will be used to deepen Protocol Owned Liquidity.
### Protocol Owned Liquidity
The `KUSv3` rewards collected on `KUSv3:WKCS` will be fully locked to increase the POVP.
### Team Emissions
As per the proposed migration proposal, 9% of the emissions are sent to the treasury. These `KUSv3` tokens will be used for various things at the discretion of the team to do various things, ie. `KUSv3` token buybacks and burns, bribe various core pools, cover protocol and development costs, add to team member voting power.
### Team Voting
Each team member has their own personal `veKUS` and they can vote as they please to attempt to generate their own source of income.
# Gauges
As mentioned in [Whitelisting](/whitelisting), in order to get an active gauge, a token requires whitelisting. Partners will all have various gauges for the tokens of their ecosystems on a token by token based consideration.
## Fees and Gauge-less LPs
Trading fees from LPs that are not granted gauges are sent to the treasury. Once a gauge is produced, all fees going forward will be sent as bribe to voters. Because of this, it is recommended that projects attempt to follow [Whitelisting](/whitelisting).
## Future Partners
At Genesis, we have whitelisted our genesis partners, however we do hold in reserve `veKUS` NFTs for future partner protocols. Negotiations with potential projects will distinguish how they can get an veNFT. That being said, some ideas of the type of requirement for future partners would be:
* A requirement to bribe some gauges, their own or core.
* A token swap
* Integrations
* Marketing campaigns
# veKUS Voting
### Requirements
Only `KUSV3` that is locked as `veKUS` can be used to vote.
New epochs start on Thursday as 00:00 UTC. Vote anytime before this. Waiting can allow you to see any bribes that come in, but not waiting ensures you get your vote in on time.
### Restrictions
There are several restrictions that you need to keep in mind when you are voting.
* If you have several `veKUS` NFTs in your wallet, you need to select each one individually
* You can only cast your vote ONCE per epoch, so make sure you allocate 100% of your voting power, and are comfortable with your choices before you cast your vote. You cannot change your vote after it is cast in the current epoch
### Rewards
Voting has several benefits that should be considered.
* Voting directs `KUSv3` token incentives. So if you care about this, vote accordingly.
* Voting on a pool grants you a pro-rata share of all the trading fees of the pool you voted on. (Only the LPs that are staked to receive `KUSv3` rewards)
* Voting on a pool grants you a pro-rata share of all the bribes that are added to the pool by any 3rd party. Bribes can be added to a pool at any time during an epoch. A snapshot of votes is taken at the end of each epoch at \~23:59 UTC on Wednesday. Bribe rewards are available between 24-48 hours after the new epoch starts.
It is REQUIRED that you CAST VOTE 🗳️ every week in order to register for the bribes. This transaction will cost gas ⛽️. If you do not cast your vote every week, you will still direct `KUSv3` to the gauge but you will NOT get a prorata share of the bribes.
### Reset to Transfer
If a `veKUS` holder wishes to transfer, or sell, their NFTs, they need to be aware that they first must reset their NFT which causes them to vote on NO gauges this epoch, thus forfeiting trading fees and any bribes. A recipient of the NFT (buyer from a market) should also be aware that they will not be able to vote until the next epoch. This feature rewards participants that stay consistent in their voting activity.
### Voting APR
In the front end, you will see a column that displays the voting APR. This metric is calculated as follows
*voting apr = (tvb / tv) \* weeks / kusv3 price \* 100%*
weeks = 52.179 (approx number of weeks in 1 year)
tvb = total value of bribes in usd term
tv = total number of votes
# Rewards
## KUSv3 Emissions
KUSv3 emissions are rewards that are distributed to liquidity providers. The amount of KUSv3 a liquidity pool receives is proportional to the votes it receives from veKUS holders.
## Fees
Fees are distributed to voters of a liquidity pools in proportion to the voting power they used to vote for that pool.
The fees are in the form of the token pair. If you vote for KUSv3-wKCS for example, you will get the fees in the form of KUSv3 and KCS.
These rewards are claimable as they accrue.
## Bribes
Bribes are external rewards from anybody that could be added to whitelisted pools and are distributed to the voters of those pools. This can be used to incentivize liquidity.
## Rebases
Rebases are distributed to veKUS holders in order to reduce their voting power dilution. These are available for claiming as they accrue.
# Security
### Difference from KuSwap and Velodrome
* ***Use trading fees as external bribes.*** In contrast to Velodrome, KuSwap takes the trading fees of liquidity pools with gauges and sends them as external bribes for that respective pool. `KCS` and `KUS` trading fees directly bribe upcoming voters to direct their votes to the `KUS:KCS` pool. KuSwap believes this creates a much better voting experience as voters clearly can see what they will get, rather than wait to see what trading fees they happen to accumulate in the week following their vote.
* ***Trading fees without gauges.*** With pairs that don't have a gauge, or have a gauge that was "killed", the trading fees are sent to the tank.
### Differences from Solidly and Velodrome (inherited by KuSwap)
#### Major changes
* ***One vote per epoch.*** In KuSwap, voters are only allowed to make "active" voting decisions (i.e. vote and reset) once per epoch. Voters must wait until the next epoch to change their votes. Voters can, however, *cast* their votes throughout the epoch.
* ***Killable gauges.*** To dissuade emissions exploitation via dummy gauges, we're allowing the [*KuSwap Council*](/whitelisting#the-kuswap-council) to kill any "bad" gauges. The Council is composed of individuals meant to serve as a credibly neutral decision-maker for the broader ecosystem.
#### Minor changes
* ***Removed the LP boost for voters.***
* ***Removed negative voting.***
#### Small changes
* ***Modifiable fees.*** Fees on KuSwap are 0.03% for stable pools and 0.25% for volatile pools.
* ***Upgradeable veNFT art.***
## Security and Audits
As a commitment towards the safety of our users and partners, we want to be transparent about the changes and the status of the security audits of our smart contracts.
### v3 Smart Contract Audits
KuSwap is a fork of Velocimeter v3 which is a fork of Velodrome Finance adapted from Solidly, the [codebase was open sourced in full](https://github.com/solidlyexchange/) by Andre Cronje and his team in March 2022.
Solidly went through a partial (only the AMM part was sent for audit) security audit in January 30, 2022. The audit was done by PeckShield and did reveal 5 low-severity and 1 informal findings.
The full audit is available for [download from Solidly git repository](https://github.com/solidlyexchange/solidly/blob/master/audits/e456a816-3802-4384-894c-825a4177245a.pdf) or [here](https://github.com/KuSwap/v3/blob/master/audits/Solidly.pdf).
Velodrome went through a security audit and a peer review as part of the Code4rena bug bounty contest.
**Velocimeter changes**:
* **Removal of Internal Fees** The fees are now directed as external bribes so the need for many contracts became redundant, ie. pairFees.sol, internalBribe.sol
#### VELODROME Security Procedures
The Code4rena contest results were released on August 8, 2022 and are available [here(opens in a new tab)](https://code4rena.com/reports/2022-05-Velocimeter/). All high- or medium-risk issues were either resolved pre-deploy, except for one known issue (users can claim eligible rewards from ExternalBribe contracts more than once) that's currently being addressed (via a wrapped contract solution). No user funds are at risk from this vulnerability, and protocols who wish to deposit external bribes should get in contact with the core team to discuss alternative solutions.
Reports from current fork audit are available [here](https://github.com/KuSwap/v3/blob/master/audits/).
### Bug Bounty Programs
Velodrome ran a [bug bounty contest on 23rd to 30th of May 2022 with awards up to $75,000 on Code4rena](https://code4rena.com/contests/2022-05-Velocimeter-finance-contest). The main scope of the contest was to cover all the new changes to the new and the original contracts.
Solidly's bug bounty program was launched in February 2022 on Immunefi.com. There were no claims for any of the $200,000 rewards ([on their Github](https://github.com/solidlyexchange/solidly/blob/master/SECURITY.md)).
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