To understand what are the contributors to Curve wars, you have to first know the components of it, consisting of a permissionless pool.
Curve finance created a permissionless factory pool for users to create liquidity pools connecting to their projects while inheriting the liquidity on Curve Fiance.
Each pool will have a portion of the CRV tokens which are from the protocol fees, emissions, etc. This is where veCRV comes to play. veCRV in the governance mechanism will determine the amount of distributed CRV to each pool.
Curve Wars is the process of striving to earn the largest CRV cake. Numerous other projects across the crypto land have applied this model, giving particularly impressive outcomes.
Distributing Incentives within Curve
On how Curve decides to distribute rewards for each pool, they hold a “Gauge Vote” every week. This Gauge weight vote allows curve governance to direct rewards in the vote-escrow Curve token, veCrv.
The chart above are various incentivized pools within Curve Finance, with the percentage of rewards going to each pool. For example, frax holds 10.45% of the votes allocated to control the rewards.
The more veCRV you have, the more you will be able to control where the rewards go for each pool. If I lock up a ton of veCRV, that would give me a lot of control over where the platform allocates its curve emissions.
So, the more CRV you hold, the more veCRV you get which can be used to influence which pool you want to get “boosted” rewards in. Different projects above would want to have a larger percentage of veCRV holdings because they can control emissions in their favour.