Liquidity Gauges are a simple, powerful, and flexible tool that gives the DAO governance the levers to direct rewards to where they add the most value. Gauges are made possible by weight voting. Weight voting democratizes decision-making by allowing token holders to vote on liquidity pool incentive ratios. It gives each user a voice and each token utility by steering the policy of the DAO.
The underlying genius of Liquidity Gauges and Weight Voting is that value-adding behavior becomes incentivized! Steering the protocol via governance participation as well as providing liquidity are beneficial behaviors that receive proper compensation from Liquidity Gauges.
As the proper value-adding behavior gets incentivized, the effect of growing interest compounds in the so-called Flywheel effect, where network effects take over to increase interest in the protocol.