Crypto glossary
Gauge (emission gauge)
A gauge is the on-chain mechanism that decides, through token-holder votes, what share of a protocol's new emissions goes to each liquidity pool.
Curve introduced gauges to distribute CRV emissions. Each eligible pool has a gauge contract where liquidity providers stake their LP tokens, and holders of locked veCRV vote on gauge weights. At the end of every voting period the weights set how much of the emissions each gauge receives, which is then shared among the LPs staked in it.
The model was copied by Balancer, Velodrome, Aerodrome and many others because it lets the community, not the team, decide which markets deserve incentives. Gauge weights are watched closely by traders: a pool that gains weight usually offers higher yields and attracts more liquidity in the following epoch.
Gauge voting can be captured by large holders, liquid lockers or projects paying bribes, so emissions may flow to pools that bring little real trading volume. Rewards are paid in the protocol's token, so high APRs can hide dilution, and adding a new gauge often requires a governance vote that small projects struggle to win.
Example
After a weekly vote, a USDC/ETH pool receives 8% of a DEX's emissions through its gauge, and LPs who staked their positions there share that amount.