> For the complete documentation index, see [llms.txt](https://docs.kodo.exchange/overview/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.kodo.exchange/overview/protocol-design.md).

# Protocol Design

Kodo Exchange uses **KODO** as a utility token and **veKODO** as governance token.

**KODO** is used for rewarding liquidity providers through emissions. **veKODO** is used for governance. Any **KODO** holder can vote-escrow their tokens for up to 4 years and receive a **veKODO** NFT in exchange.

### Core Mechanics

The protocol is designed to enable token swaps and generate fees (from **Traders**) by attracting liquidity.

Every epoch liquidity providers (**LPs**) receive **KODO** token emissions proportionally to the votes the pools accumulate. Only staked (in the protocol gauges) liquidity receive emissions.

Participants can lock their **KODO** to be able to vote on the next epoch distribution of emissions, becoming **veKODO Voters**. **veKODO Voters** are rewarded (proportionally to locked amounts) for their votes with 100% of the protocol trading fees from the previous epoch and any additional voters incentives from the current epoch.

Protocols on Taiko looking to incentivize liquidity can incentivize **veKODO** voters (i.e., deposit token rewards for voters of a pool) and accumulate **veKODO** to vote directly.


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