Most DeFi protocols distribute rewards on autopilot. Liquidity mining programmes spray tokens at every pool equally, or follow some formula that nobody votes on and nobody questions until the emissions run dry. Alvara does it differently. ALVA rewards flow to the BSKTs that the community actively votes for, every epoch. This is gauge weight voting, and it is the mechanism that ties the entire protocol together.
If you hold ALVA and are not voting, you are leaving rewards on the table and letting other people decide which baskets get incentivised. This post explains exactly how the system works, from locking to voting to claiming.
The Big Picture
Gauge weight voting answers a simple question: which BSKTs should receive ALVA rewards this epoch?
Instead of the protocol deciding centrally, the community decides. Anyone who locks ALVA tokens for veALVA gets voting power. Each epoch, veALVA holders allocate their votes across the BSKTs they believe deserve incentives. At the end of the epoch, rewards are distributed proportionally: BSKTs that received more votes get more ALVA. Voters who participated earn DAO rewards for doing so.
The result is a competitive flywheel. Managers are motivated to build good baskets that attract votes. Voters are motivated to identify the best baskets because their own rewards depend on participation. And LP holders in rewarded BSKTs benefit from the additional ALVA incentives directed their way.
Step 1: Lock ALVA for veALVA
Voting power comes from veALVA, which you get by locking ALVA tokens on Ethereum mainnet. The amount of veALVA you receive depends on two things: how much ALVA you lock and how long you lock it for.
Longer locks mean more voting power. The multiplier ranges from 0.01x for a one-week lock all the way up to 10x for a 48-month lock. There is also a "Forever" lock option that gives you a permanent 2x multiplier with no decay.
A concrete example: if you lock 1,000 ALVA for 12 months, you receive 1,000 veALVA. Lock the same amount for 48 months and you get 10,000 veALVA. Ten times the governance power from the same capital, just committed for longer.
veALVA decays over time
Unless you choose the Forever lock, your veALVA balance decreases linearly as your lock period approaches expiry. At expiry it reaches zero and your ALVA unlocks. This decay is deliberate: it ensures that voting power stays concentrated with people who have ongoing skin in the game, not just those who locked once and walked away.
veALVA is non-transferable. It is bound to the wallet that locked the ALVA. You cannot sell it, delegate it, or move it to another address. Your voting power is yours alone.
Step 2: Vote Each Epoch
Epochs are recurring cycles during which veALVA holders allocate their voting power to specific BSKTs. Each epoch, you choose which baskets you want to support and how much of your veALVA to allocate to each.
You do not have to concentrate all your votes on one basket. You can spread them across multiple BSKTs, or go all in on one you believe in. The allocation is entirely up to you.
Voting happens through the DAO page on the Alvara app. Select the BSKTs you want to vote for, set your allocation, and submit. Your votes are recorded and count toward that epoch's reward distribution.
Why vote at all?
Two reasons. First, your votes shape which BSKTs get rewarded. If you hold LP tokens in a basket, voting for it directs more ALVA rewards to that basket and its holders, including you. Second, voters earn DAO rewards. Only veALVA holders who actually participate in gauge weight voting during an epoch are eligible for that epoch's rewards. If you hold veALVA but do not vote, you get nothing.
Step 3: Rewards Flow
After each epoch closes, two things happen:
- BSKT rewards. ALVA emissions are distributed to BSKTs proportionally based on the votes they received. BSKTs with more gauge weight get a larger share. These rewards flow to the LP holders of those baskets.
- DAO rewards. veALVA holders who voted during the epoch receive ALVA rewards proportionally based on their voting participation. Longer locks and more veALVA means a larger share of the DAO rewards pool.
Reward distribution uses a merkle proof system for gas efficiency. The merkle tree root is published onchain, and eligible addresses can claim their rewards at any time. There is no expiration on claims, so you can batch them up or claim per epoch.
All claims are processed on Ethereum mainnet. Claimed ALVA transfers directly to your wallet.
The Flywheel Effect
This system creates a self-reinforcing cycle that aligns every participant in the protocol:
- Managers create and maintain quality BSKTs because baskets that attract votes receive more rewards, which attracts more LP holders, which means more management fees.
- LP holders benefit from ALVA rewards directed to the baskets they invest in, on top of the portfolio returns from the underlying assets.
- Voters earn DAO rewards for participating, with their voting power proportional to their commitment (lock duration). They are incentivised to identify and support genuinely good baskets.
- The protocol benefits because rewards flow to where the community sees the most value, not where an algorithm or core team decided to point them.
The Curve Wars Playbook
If any of this sounds familiar, it should. Alvara's gauge system is built on the same model that made the Curve Wars one of the most consequential episodes in DeFi history.
For those who missed it: Curve Finance uses veCRV gauge voting to direct CRV emissions to specific liquidity pools. Protocols that wanted deep liquidity for their stablecoins realised it was cheaper to acquire veCRV voting power and direct emissions to their own pools than to pay for liquidity through traditional incentive programmes. What followed was an all-out war for veCRV.
Convex Finance built an entire protocol around accumulating veCRV on behalf of depositors, becoming the single largest holder. Yearn, Frax, and dozens of other protocols competed to lock CRV or bribe Convex voters through platforms like Votium. At its peak, Curve held over $20 billion in TVL, and protocols were spending millions of dollars per month in bribes just to influence where CRV emissions flowed. The Curve Wars proved something important: when gauge voting controls the flow of rewards, the voting power itself becomes one of the most valuable assets in the ecosystem.
Alvara uses the same proven mechanism. veALVA holders vote to direct ALVA rewards to specific BSKTs, just as veCRV holders vote to direct CRV to specific pools. The flywheel dynamics are identical: acquire voting power, direct rewards, attract capital, earn fees, repeat.
From Curve Wars to ALVA Wars
Here is where it gets interesting. The Curve Wars played out over liquidity pools. Important infrastructure, but ultimately a backend service: protocols needed deep liquidity to function, and they used gauge voting to get it. The total addressable market was DeFi liquidity.
The ALVA Wars will play out over something much bigger: investment products.
Onchain ETFs are not a backend service. They are the end product. Every BSKT is a portfolio that real people hold, track, and invest in. The gauge voting system does not just direct rewards to infrastructure. It directs rewards to the baskets that the community believes are the best investment strategies. That is a fundamentally different value proposition.
Think about the scale. The global ETF market is worth over $14 trillion. The onchain share of that is effectively zero today. As tokenized investment products grow, the competition to attract capital into specific BSKTs will intensify. Managers will want gauge weight directed at their baskets to attract LP holders. Protocols building on Alvara will want their ecosystem baskets incentivised. DAOs will want their treasury baskets to earn additional ALVA rewards. And the only way to influence any of it is through veALVA.
The Curve Wars taught DeFi that gauge voting power is worth fighting for when it controls liquidity flows. The ALVA Wars will prove the same thing for something far larger: the flow of investment capital into onchain portfolios.
Every ALVA token locked into veALVA is a vote on which investment strategies get rewarded. As the number of BSKTs grows, as more capital flows onchain, and as more managers compete for holders, the demand for that voting power only increases. The people locking ALVA today are positioning themselves at the centre of a market that barely exists yet but has a multi-trillion dollar ceiling.
Where Does the ALVA Come From?
ALVA has a fixed maximum supply with deflationary mechanics. Locked tokens are permanently removed from circulating supply for the duration of the lock. The protocol buys back ALVA using a percentage of platform fees, and these bought-back tokens fund the staking rewards pool.
The combination of fixed supply, continuous buybacks from fees, and tokens locked in veALVA creates natural supply pressure. As the protocol grows and more fees are generated, more ALVA is bought back. As more people lock for veALVA, less ALVA circulates. The Curve Wars showed what happens to a token when everyone wants to lock it and nobody wants to sell it. The same dynamics apply here, except the underlying market is orders of magnitude larger.
Governance Beyond Gauges
veALVA is not only for gauge weight voting. It is also the governance token for broader protocol decisions. Snapshot proposals are weighted by veALVA balance, meaning the same people who are most committed to the protocol (longest locks, most skin in the game) have the most influence over its direction.
You can follow governance discussions on the governance forum and vote on proposals through Snapshot.
Getting Started
If you are holding ALVA and not participating in gauge weight voting, you are missing one of the core reasons the token exists. Here is the quick version:
- Go to the Alvara app and connect your wallet on Ethereum mainnet.
- Lock your ALVA tokens for veALVA. Choose your lock duration based on how committed you are. Longer locks mean more voting power and more rewards.
- Each epoch, head to the DAO page and allocate your votes to the BSKTs you want to support.
- After the epoch closes, claim your DAO rewards from the Claim Rewards tab.
There is no expiration on reward claims, so you can claim at your own pace. But you must vote each epoch to be eligible for that epoch's rewards.
Already locked? Head to the DAO page and make sure you are voting this epoch. If you are not voting, you are not earning.