veCRV: Overview
Info
veCRV, an acronym for vote-escrowed CRV, represents CRV tokens that are locked in the voting escrow contract for a specified period. These tokens can only be obtained by locking CRV tokens, and are not transferable.
To obtain the following benefits, users must lock CRV tokens:
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Governance¶
The veCRV balance represents the voting power of a user, which allows them to vote on on-chain proposals. Additionally, a crucial part of Curve governance are gauge weight votes. Curve token emissions are created in a way that allows veCRV holders to choose how future emissions are allocated. Liquidity pools on Curve can be added to the GaugeController via a successfully passed DAO vote, making them eligible to receive CRV token emissions. The gauge weights determine how much CRV each pool receives. Every Thursday at 00:00 UTC, the updated gauge weights are applied.
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Earning Fees¶
Starting on the 19th of September 2020, 50% of all trading fees are distributed to veCRV holders, while the remaining 50% goes to the respective liquidity providers of the pools. This distribution was implemented following a community-led proposal, aimed at aligning the incentives between liquidity providers and governance participants (veCRV holders). Additionally, since the launch of Curve's own stablecoin (crvUSD), 100% of the accrued interest from crvUSD markets also goes to veCRV holders.
The collected fees are converted to
3CRV
(the LP token for 3Pool) and distributed among veCRV holders. -
Boosting LP¶
One of the primary incentives for vote-locking is the boost mechanism. Users who provide liquidity to a pool and have some vote-locked CRV receive boosted CRV rewards.