> For the complete documentation index, see [llms.txt](https://docs.ionex.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ionex.trade/ionex-dex-amm/flywheel-fundamentals.md).

# Flywheel Fundamentals

Elevating Engagement amongst all stakeholders

The Ionex ecosystem thrives on synergy and balance, combining the efforts of users, protocols, and liquidity providers to propel our liquidity strategy. This collaborative approach creates positive feedback loops, boosting platform functionality and value.

<figure><img src="https://3946410858-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FemxVQ1ZV4jv5yOxSB8pd%2Fuploads%2FguVSey80d0MgVu6THMQw%2Fimage.png?alt=media&amp;token=ae6aecc6-774d-403b-848e-8c6c5b1343ea" alt=""><figcaption></figcaption></figure>

#### **Liquidity Providers** <a href="#liquidity-providers" id="liquidity-providers"></a>

At the heart of our DEX, liquidity providers offer seamless trading by utilizing a concentrated liquidity model. This not only improves capital efficiency but also increases fee generation, outperforming traditional DEX models. Providers are rewarded with oINX tokens, giving them flexibility to meet their goals.

#### Traders <a href="#traders" id="traders"></a>

Traders enjoy a vibrant trading environment with ample liquidity and minimal slippage, ensuring competitive rates. All trading fees go directly to veINX voters, rewarding those who actively contribute to our growth.

#### Protocols <a href="#protocols" id="protocols"></a>

Protocols can kickstart their liquidity by incentivizing veINX voters to support their pools. This increases emissions to those pools, enhances APR, and attracts more liquidity providers, making protocols an essential piece of our ecosystem.

#### veINX Voting <a href="#velynx-voting" id="velynx-voting"></a>

veINX voters play a critical role, receiving 100% of trading fees and bribes from protocols to prioritize certain pools. This system allows them to guide emission rewards to preferred pools, creating a dynamic liquidity landscape.

Ionex adopts ve(3,3) mechanics, combining Vote-Escrow (inspired by Curve) for long-term engagement and (3,3) game theory (from Olympus DAO) for stake-based rewards. This encourages liquidity provision, strategic INX locking, and active governance participation, enriching our ecosystem for all stakeholders.