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The core mechanism of UpDEX is the gauge system, which has been gaining attention due to the so-called liquidity wars and incentives offered to veUP holders. After depositing liquidity into a pool, providers stake their LP tokens into the corresponding gauge, where they begin earning UP emissions.
The concept is straightforward: every week, UP emissions are distributed, decaying at a rate of 2% per week. It will take around 10 years to reach 99% of the max cap. The minting algorithm is designed in such a way that it will never actually reach the maximum supply, as it approaches the limit asymptotically. veUP holders have the power to decide which liquidity providers receive these emissions.
This power is incredibly valuable for protocols that wish to deepen their on-chain liquidity. It is equally important for veUP holders, who have an interest in directing emissions towards pools that will generate the most fees for themselves. Emissions are updated on a weekly basis on Monday at 0 UTC.