Gauge Voting
A governance mechanism where token holders vote to direct a protocol's token emissions toward specific liquidity pools or activities, called 'gauges.'
Gauge voting is a mechanism, most notably used by Curve Finance and several protocols that adopted a similar design, in which each liquidity pool or incentivized activity has its own "gauge," and token holders — often weighted by vote-escrowed voting power (see Kaavon's "Vote-Escrowed Tokenomics (ve-Tokenomics)" glossary definition) — periodically vote to decide what share of the protocol's overall token emissions each gauge receives. A pool whose gauge wins more votes receives a larger share of newly issued tokens as rewards for its liquidity providers.
Because directing emissions toward a specific pool tends to attract more liquidity to it, gauge voting gives voting-power holders real influence over where capital concentrates across the protocol, which is exactly the incentive that drove the intense competition known as the Curve Wars (see Kaavon's "Curve Wars" glossary definition). Gauge weights are typically re-voted on a recurring basis, such as weekly, so the distribution of emissions can shift over time as voting power and priorities change.
Examples
- A liquidity pool whose gauge receives a larger share of votes will typically attract more liquidity providers, since they stand to earn a larger share of the protocol's token emissions.
- Gauge weights are commonly re-voted on a regular cycle, meaning a pool's share of emissions can rise or fall as voting power shifts between gauges over time.