# Explaning $veLARA

## Maturity period debunked

As voted on by the Lara community in its first [DAO proposal](https://snapshot.org/#/laradao.eth/proposal/0xac59595a36b1288d257e2b41523bef4bcfa691bff6201cac9eea757f60f69fee), `$veLARA` tokens have a maturity period of 6 months and a linear exchange rate. This simply means that from the moment you claim `$veLARA` tokens as a staking reward you need to wait 6 months to be able to redeem it `1:1` in the Lara Protocol. You can redeem it earlier too, but it will proportionally be worth less `$LARA` the quicker you redeem it. All `$veLARA` redeemed is instantly burnt.

{% hint style="info" %}
Example: \
 Bob claimed 1000 `$veLARA` as staking rewards today. If he is:

* redeeming them the next day, he's getting a very very small amount of `$LARA` for it.
* redeeming them in 3 months, he's getting exactly 500 `$LARA` for it.
* redeeming them in 6 months, he's getting the full 1000 `$LARA` for it.
* redeeming after the 6 months have passed doesn't add a multiplier to the value, Bob will still get 1000 `$LARA` for his `$veLARA`.
  {% endhint %}

## What $veLARA is vs isn't

The token is a vested version of the token. It serves as a way of locking supply and optimizing emission rates of the underlying token.

### Why is $veLARA good for the $LARA ecosystem

* Through introducing `$veLARA`, we keep inflation and additional token emissions as low as possible.
* `$veLARA` serves as a receipt for your future claimable `$LARA`. 
* Having vested staking rewards we're enforcing protocol usage by minimising negative price pressure.
* Enhances the voting power of people who actively partake in the Lara Protocol.

### What $veLARA isn't

* Although you have full access to trade or transfer `$veLARA` tokens, they are not designed to be a freely tradeable asset with a secondary market in place.

{% hint style="danger" %}
When someone claims `$veLARA` tokens as staking rewards, only that address can redeem them for `$LARA.`

`Example:`

`Bob staked 1000 $LARA and claimed 50 $veLARA as staking rewards. Then, Alice buys the 50 $veLARA from Bob and then tries to redeem $LARA tokens for it. Alice will fail redeeming because Bob is the only one that can exchange those 50 $veLARA tokens for $LARA.`
{% endhint %}