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Bao Finance will be migrated from V1 to V2
As the crypto industry evolves, so do the economic models that underpin token projects. The Bao community has recognized that the current tokenomics of Bao are not optimal for incentivizing long-term staking and providing liquidity for our synthetics long term. To address these issues, the community is excited to introduce veBAO, a new staking and governance mechanism resulting in a number of changes that will encourage BAO holders to lock their tokens and help bootstrap the Bao ecosystem as it starts to take shape.
To achieve this, Bao needs to overhaul its tokenomic by migrating to a new version of the Bao token.
As part of the migration to veBAO, we will also be migrating to a new token. In order for our BAO token to be compatible with the veBAO contracts, we need to reduce the supply by a factor of 1000. To do this we will create a swap contract that burns BAO tokens and replaces them with BAOv2 tokens at a ratio of 1000:1.