Gauges & Incentives Overview
Before diving in, make sure to fully understand how CRV inflation based on gauge weights works.
Learn more here: Gauge Weights.
A gauge is a smart contract that distributes rewards to liquidity providers (LPs) in Curve pools or lending vaults. Pools and lending vaults work perfectly fine without having a gauge; it's simply an additional contract on top that measures the provided liquidity of users.
When rewards (such as CRV emissions or third-party incentives) are active on a gauge, users must stake their LP or vault tokens into the gauge contract to be eligible for those rewards.
Protocols and asset issuers can use gauges to grow liquidity — by offering incentives to LPs through CRV emissions, third-party token rewards, or both.
To get started quickly, check these out:
Why Use a Gauge?
Gauges enable protocols to reward users for providing liquidity in Curve pools — either with CRV emissions, third-party incentives, or both. These incentives create a yield opportunity for LPs, which in turn attracts deposits. The more rewards a pool offers, the more attractive it becomes to liquidity providers. As more users deposit into the pool to earn yield, the total value locked (TVL) increases. Higher TVL leads to deeper liquidity, reduced slippage, and a better trading experience for the token — ultimately making it more usable and integrated across DeFi.
Gauges also align incentives between protocols, LPs, and Curve governance:
- Protocols benefit from deep liquidity
- LPs earn yield from CRV and/or third-party rewards
- veCRV holders can vote on gauge weights and are (partly) incentivized through vote incentives
Types of Rewards Through a Gauge
For a more detailed explainer see: Incentives: CRV Emissions vs. Permissionless Rewards
CRV Emissions (Gauge Weight Voting)
- Distributed weekly from Curve DAO’s CRV inflation schedule
- Allocated based on veCRV gauge weight voting
- Requires DAO approval to whitelist the gauge
Permissionless Rewards (Third-Party Incentives)
- Any token can be added to a gauge (not recommended: rebasing tokens will lose the rebases)
- Useful to bootstrap liquidity or reward LPs using the protocol's own token
- Requires no governance or approval
Deploying Gauges and Receiving CRV Emissions
Deploying a gauge is fully permissionless — anyone can create a gauge for a Curve pool or lending vaults. Once deployed, the gauge can immediately begin distributing third-party incentives, such as your project’s native token or other ERC-20 rewards.
However, if a gauge should be eligible to receive CRV emissions, it must first be approved and whitelisted by the Curve DAO through a governance vote. Only DAO-approved gauges are eligible to receive a share of Curve's weekly CRV inflation — and emissions are not fixed: they are determined by veCRV gauge weight voting, which takes place on a weekly basis.
- Gauges can always and instantly after deployment distribute external (permissionless) incentives.
- CRV emissions (via gauge weights) require DAO approval and veCRV weight. More here: Gauge Weights.