Present Indicative: Contract Verbs

Why contract? Because, if the stem ends in α, ε or ο, for reasons of fluency of speech, that stem α, ε or ο combines with the ending. In Attic Greek anyway.
Look at English: We say things like "doesn't, won't, he's gone, they've left, the're not here". Why? Because it's easier - for us! That's elision, the Greeks do that too. But they found out that for them, contracting action verbs was also easier. For them!

 
  δουλόω  enslave, am enslaving  
  
δουλό ω   becomes  δουλ ῶ 
δουλό εις   becomes  δουλ οῖς 
δουλό ει   becomes  δουλ οῖ 
δουλό ομεν   becomes  δουλ ῶμεν 
δουλό ετε   becomes  δουλ οῦτε 
δουλό ουσιν   becomes  δουλ οῦσιν 

 

 Note 

All the endings are regular, only the stem has changed: it has lost its end vowel, ο in this case. And that vowel has combined with the regular endings, lenghtening them. But this ο was an accented ό and the accent has stayed put, changing to a circumflex to let us know that it really is 2 syllables fused into one.

Contraction Rules
unaccented accented
  ο + ω     becomes      ω       ό + ω     becomes      ῶ    
  ο + ει     becomes    οι       ό + ει     becomes    οῖ    
  ο + ε     become    ου       ό + ε     become    οῦ    
  ο + ο      ό + ο   
  ο + ου      ό + ου