On many DeFi protocols, governance tokens aren't just held—they can also be locked up in exchange for tokens with the “ve” prefix. The longer you lock them up, the more voting power and rewards you get, but you can't move your tokens during that period. Curve popularized this design, which is generally known as the veToken model.

$CRV veCRV, obtained by locking up tokens, is the most classic example of the veToken model. Current price: 0.3527 (24h -0.028%).

📌 Where does veCRV come from?

On Curve, users can get veCRV (vote-escrowed CRV) by locking up CRV. The maximum lockup period is 4 years: locking 1 CRV for 4 years gives you 1 veCRV, while locking it for 1 year gives you just 0.25 veCRV.

veCRV is non-transferable, and its balance decreases linearly as the remaining lock period gets shorter, reaching zero at expiry. To maintain your voting power, you have to keep extending the lock. CRV cannot be withdrawn early while it is locked.

📌 What can veCRV do?

First, governance voting. Most importantly, it determines how CRV emissions are allocated among pools through gauge voting, where weights are updated weekly. Pools that receive more emissions give their liquidity providers more CRV rewards.

Second, veCRV holders share in a portion of Curve’s trading fees. Third, it provides a boost: liquidity providers who hold veCRV can receive up to 2.5x boosted CRV rewards.

📌 What are the Curve Wars about?

Since gauge voting determines where emissions go, projects that need liquidity in their pools—such as stablecoin issuers—have an incentive to secure voting power. They can either buy and lock CRV themselves or pay veCRV voters incentives (commonly known as bribes) to vote for their pools.

This contest for voting power is known as the “Curve Wars.” It gives veCRV voting power a price of its own and provides those who lock their tokens with an additional source of income from voting incentives.

📌 What role does Convex play?

Convex lets users deposit CRV in exchange for cvxCRV. The CRV it receives is permanently locked as veCRV, and the resulting pooled voting power and boost rewards are distributed to participants. Users who don’t want to lock their tokens themselves for four years can still indirectly earn boosted rewards.

The trade-off is that this process cannot be reversed: cvxCRV may trade below CRV on the secondary market. How Convex votes its veCRV is determined by vlCVX voting, which is earned by locking CVX—effectively adding another layer of governance on top of the existing one.

📌 A few final thoughts

The veToken model trades time for power: the longer you lock, the more influence and rewards you get, but you cannot sell your tokens while they are locked, regardless of how the price moves. Before participating, consider whether you can truly do without those tokens for the entire lock period. Market conditions are always uncertain, so think ahead about what you’ll do if your prediction is wrong.

What do you think? Join the conversation in the comments.