Introducing Cadabra

Cadabra Finance is an innovative way to earn in DeFi by providing liquidity and using ve(3, 3) tokenomics.

Farming + Yield Aggregator + ve(3,3) = Earning Magic

We have modified and expanded the popular ve(3,3) approach.

We have added opportunities for extra earnings. Our strategies work with underlying yield sources, which are various DeFi yield-generating protocols, collecting and distributing their rewards among voting users.

Classic ve(3,3) model

The ve(3,3) model is a tokenomics mechanism that incentivizes long-term staking and governance participation by rewarding users who lock their tokens for voting, creating a positive feedback loop for both token holders and the protocol. In the classic version, the platform distributes its token emissions based on user voting.

Cadabra allows users not only to earn passive yield in ABRA tokens but also to actively influence on the yield distribution and to earn rewards from underlying protocols by voting.

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Why Use Underlying Yield Sources?

Yield sources are selected based on the primary asset of the strategy, and the yield sources combination determines the level of risk. The strategy interacts with underlying protocols investing on behalf of the user and collecting rewards, which are then distributed among those who voted for the strategy.

In other words, Cadabra functions both as a classic ve(3,3) tokenomics model, distributing ABRA token emissions among liquidity providers, and also collects extra rewards from underlying protocols, distributing them among those who vote for specific yield sources.

This creates a two-level system:

on the first level, there are strategies that provide liquidity

on the second level, there are yield sources with their external rewards.

This structure offers two main opportunities for users to earn:

• Deposit liquidity into a strategy and receive rewards in ABRA tokens.

• Vote for strategies and yield sources to earn rewards gathered from underlying protocols.

These options can be combined to boost your yield.

The yields from underlying protocols vary over time, and to maximize earnings, strategies rebalance funds among yield sources and, correspondingly, among underlying protocols. Rebalancing is done based on voting results. The more votes a yield source receives, the more funds will be allocated to it in the next epoch. Factors that may influence users to vote for specific yield sources include expected returns, market conditions, and the overall performance of the underlying protocols.

For maximum decentralization, Cadabra users decide how funds are rebalanced. Instead of relying on algorithms, we use the "Wisdom of the Crowd," which means that the collective opinions of many independent users are statistically aggregated to achieve the most accurate decision or forecast.

Summary

The benefits of using underlying protocols are as follows:

• Liquidity provided in strategies is allocated to underlying protocols.

• Liquidity providers are rewarded with ABRA tokens.

• The APR of strategies depends on voting results.

• The allocation of liquidity across underlying yield sources is determined by voting.

• Users who vote receive external rewards collected in the next epoch.

Read more in our articles, documentation, and watch our training videos.