Understanding Gauges

Farms, but better.
A gauge is a fancy crypto term for defining how much of the PLY rewards an LP can earn when providing liquidity to a Plenty liquidity pool. The higher the votes for a gauge, the more PLY can be earned by staking LP tokens in a gauge.
The gauge is an instrument to measure which liquidity pool is weighted most heavily with rewards. Voting for gauges occurs weekly.

The Gauge System

PLY emissions should be directed to users who provide liquidity within the protocol. This usage is measured via “gauge” smart contracts. Each liquidity pool has an individual liquidity gauge.
To measure liquidity, the user deposits their LP tokens into the gauge. PLY emissions each gauge is getting depends on the current inflation rate and the gauge weight. Each user receives a share of PLY proportional to the amount of LP tokens locked in a gauge.

Gauge Voting

Users can allocate their voting power towards one or more gauges to earn trading fees and bribes attached to the liquidity pool. Gauges receive newly minted PLY proportional to its vote weight. Each user with a vePLY NFT can change their preference at any time.
When a user applies a new weight vote, it gets applied at the start of the next epoch (1 week). The weight vote for any one gauge cannot be changed more often than once in 7 days.
Voting Scenario
The main perk of being a vePLY NFT holder is that you can vote on the distribution of weekly PLY emission across the Gauges. The distribution is calculated based on the voting power you assign to each gauge during the voting period.
Voting is in an ‘always-on’ state, and each week on a fixed day results are factored in and gauge weights are adjusted.
vePLY holders receives AMM fees only for the gauges they vote for. It is required to vote in a week in order to receive the fees for that week.
Scenario for Voting:
  • Assume there are three AMM pools and associated gauges:
    • kUSD - CTEZ
    • USDtz - CTEZ
    • uUSD - CTEZ
  • There are 3 vePLY holders with following voting power:
    • Alice: 4,000
    • Bob: 3,500
    • Carol: 2,500
  • The vote distribution across a certain week is:
    • kUSD - CTEZ: 4,500 votes (2,000 votes from Alice and 2,500 votes from Bob)
    • USDtz - CTEZ: 3,000 votes (2,000 votes from Alice and 1,000 votes from Bob)
    • uUSD - CTEZ: 2,500 votes (2,000 votes from Carol)
  • PLY distribution for the gauges for the current week is 150,000 PLY:
    • kUSD - CTEZ gauge will distribute 45% of the allocation: 67,500 PLY
    • USDtz - CTEZ gauge will distribute 30%: 45,000 PLY.
    • uUSD - CTEZ gauge will distribute 25%: 37,500 PLY.
Scenario for Fees:
  • For kUSD pool, ALICE has 44.4% vote share and BOB has 55.6%. The fees will be distributed amongst them in same ratio.
  • For USDtz pool, ALICE has 66.6% share and BOB has 33.3% share.
  • For uUSD pool, JOHN has 100% share of the fees, since he is the only voter.
Votes for Gauges can also be incentivised by giving bribes to those who vote for emissions through the gauge. The bribe reward is distributed based on the voting share, similar to the distribution of fees.