Congrats! Your addgauge proposal passed and you have deployed your first Convex pool. We can now explore the meat of the matter: **incentives**.

Convex is the parent company of DeFi. We hold a controlling interest in several key protocols, including, but not limited to: Curve, Prisma, and FX. We use **vlCVX** (vote locked CVX) to **direct the emissions** of these respective protocols **through biweekly votes** ("epochs").

Curve has the most TVL and the deepest liquidity, and, of course, Curve is where we just passed your gauge proposal, so we will start with Curve. We will explore Prisma and FX in Incentives 103.

**Votium, the Preferred Votemarket**
For our purposes, we will only be considering Votium as our preferred vote market. There are other vote markets, but Votium is by far the largest and most popular. Further, only Votium has Llama Airforce integration, which provides invaluable data and ease of use for participants. Lastly, CVX5 has built over three years of comradery with the operators of both Votium and Llama Airforce. Should you encounter any issues it will be easy for us to liase support.

**A Tale of Two Incentives**
There are two primary methods to provide incentives. **Voting Incentives** are achieved by making a deposit on Votium by clicking the "Deposit a New Incentive" button.
(https://votium.app/)

On the other hand, **Direct Incentives** are made by directly depositing incentives/rewards to the LP Pool. You may directly add incentives on Convex, harvest the pool, and then it will immediately begin a 7 day stream. Alternatively, you may also add incentives directly to Curve, but rewards will need to accrue first.

Direct Incentives on Curve are permissionless. Direct Incentives on Convex are permissioned, but can easily be facilitated by coordinating with CVX Devs. We have a good relationship with CVX Devs but do not represent them in any capacity.

As an example, we continue to assist Trident with their Direct Incentives on Convex as well as their Voting Incentives. For Trident's pyUSD, the CVX Devs first had to authorize pyUSD as an incentive/reward. Then Trident was able to send pyUSD as a Direct Incentive to the rewards address. Rewards such as CRV or CVX are already whitelisted and do not require permission.
(a combination of Voting Incentives and Direct Incentives in action on Convex)

**CVX controlled 14d emissions $**
Liquidity is not cheap. A prudent protocol should calculate the most efficient means of achieving its target TVL goals each epoch by assessing whether to pursue Voting Incentives, Direct Incentives, or a combination of both.

The easiest way to calculate efficiency is through the 14 day CVX controlled emissions.

https://buycvxcorrect.netlify.app/
(screenshot taken as of 2024/03/27 | CRV price ~$0.70)

From the screenshot above, CVX currently controls around $2.14mm in $CRV emissions in one epoch. Therefore, we can extrapolate that the absolute cap for voting incentives would be $2.14mm, unless the market participants are extremely inefficient.

The above paragraph is just an example. Use the buycvxcorrect tool to find the current "CVX controlled 14d emissions $" as red-underlined in the screenshot above.

**Emissions / $1 spent on bribes**
Next, we visit Llama Airforce.
https://llama.airforce/#/incentives/rounds

We will use this Round 66 as an example and pretend it is the current active round.

Here you can see that the total amount of incentives provided by various protocols reached $1.81mm.

Again, we are pretending this is a current round, so if there are $2.14mm of voting incentives "available" and $1.81mm of voting incentives "used" (as protocols deposit incentives), then there are still $330k worth of voting incentives "left" before it would make more sense to provide Direct Incentives.

You can get confirmation by visiting the "Overview" page of Llama Airforce.
https://llama.airforce/#/incentives/overview/votium/cvx-crv

So long as this number is greater than $1, it is more efficient for you to incentivize liquidity through Votium by providing Voting Incentives.

Here is the official Llama Airforce take:

**TLDR**
In summary, use the "CVX controlled 14d emissions $" to find the total amount of Voting Incentives "available" and then monitor the total amount of Voting Incentives deposited to make sure it is efficient to provide Voting Incentives on Votium.

From this, you can already extrapolate that it may be beneficial to provide Voting Incentives as late as possible before the Votium cutoff and many protocols do just that.

**How Much Voting/Direct Incentives should I provide?**
The unpopular answer is that this a very broad question with a very nuanced answer as it requires the consideration of several variables which change constantly.

The first few rounds should be used a feeler. The market tends to gravitate towards a "base" APR. If you double the incentives while keeping APR the same, you can expect the TVL to double over time.

For example, let's consider the average USDC maxi. Under current market conditions as of 2024/03/28, this user would probably require a minimum of 10% APR to participate as a LP if we factor in gas, counterparty, and smart contract risk. That 10% goes up as the user prices in the risk of the pairing.

But let's say USDC is paired with pyUSD, a USDC/pyUSD pool, about as low risk as it gets. Let's also assume it takes $100k in incentives per epoch to maintain a $40mm 10% APR pool. If we double the incentives to $200k we can slowly expect the TVL to double over time to $80mm as the APR is arbed back to 10%.

Ok, that's it!

In Incentives 102 we will explore some more advanced strategies, including POL, rebates, and more!