In many DeFi protocols, governance tokens aren’t just held—they can also be locked up in exchange for a token with the “ve” prefix. The longer they’re locked, the more voting power and rewards you get, but your tokens can’t be moved during that time. Curve popularized this design, which is commonly known as the veToken model.

$CRV is Curve’s governance token, and the veToken model was popularized by Curve. Current price: 0.2758 (24h +8.37%).

— How does veCRV work? —

On Curve, users can lock up CRV to receive veCRV (vote-escrowed CRV). The maximum lock-up period is 4 years: locking 1 CRV for 4 years gives you 1 veCRV, while locking it for 1 year gives you only 0.25 veCRV.

veCRV is non-transferable. 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 CRV cannot be withdrawn early during the lock period.

— What can veCRV do? —

First, governance voting. Most importantly, it determines how CRV emissions are allocated among pools through gauge voting, which updates the weights every week. Pools allocated more emissions give more CRV rewards to the people providing liquidity there.

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

— What are the Curve Wars about? —

Since gauge voting determines where emissions go, projects that need deep liquidity—such as teams issuing stablecoins—have an incentive to secure voting power. They can either buy and lock CRV themselves or pay veCRV voters to vote for their pools (a practice commonly known as a “bribe”).

This contest for voting power is known as the “Curve Wars.” It gives veCRV voting power a market price and provides people who lock their tokens with additional income from voting incentives.

— What role does Convex play? —

Convex lets users deposit CRV in exchange for cvxCRV. The CRV received is permanently locked as veCRV, and the voting power and boost rewards accumulated are then distributed among participants. Users who don't want to lock their tokens for four years can still indirectly benefit from boosted rewards.

The trade-off is that this process cannot be reversed: cvxCRV may trade at a lower price than CRV on the secondary market. How Convex votes its veCRV is determined by votes from vlCVX holders, who receive vlCVX by locking CVX—effectively adding another layer of governance on top of the first.

— A few final thoughts —

The veToken model trades time for power: the longer you lock, the more influence and rewards you get, but you can't sell your tokens while they're locked, no matter how the price moves. Before participating, consider whether you'll truly be able to do without those tokens for the entire lock period. Be extra cautious of projects claiming to offer high returns.

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