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

# xCLEO "Flywheel"

xCLEO incorporates an inherent flywheel mechanism within its exit penalty system. All forfeited or exited xCLEO tokens are utilized as bribes for high-impact liquidity pairs that generate significant fees and volume. This ensures that the bribes remain balanced and aligned with the overall health of the DEX.

The amount of xCLEO allocated for bribes follows an inverse relationship with the vesting of xCLEO. As more vesting periods are completed without any exit penalties, the xCLEO bribes decrease. Conversely, if a significant amount of xCLEO is being instantly exited, incurring exit penalties, the xCLEO bribes naturally increase to compensate for the loss.

This creates a sustainable flywheel within the existing ve(3,3) flywheel framework, fostering long-term growth of the ecosystem while effectively aligning the interests of capital providers.


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