Four stages route DEX rewards to trading pairs

DEX rewards reach trading pairs when a protocol assigns token emissions to pools, then pays eligible liquidity providers who stake in those pools’ gauges. On Blackhole, the process runs by weekly epoch: veBLACK holders vote on pool incentives, and each pool’s gauge records staked liquidity for reward distribution. A swap route is a separate part of the mechanism: it determines how tokens move between pools to complete a trade. For that path, see this guide to Blackhole swap routes from AVAX or between tokens.

How are rewards set for each epoch?

First, the protocol sets the emissions available for an epoch. An epoch is a seven-day period, from Thursday at 00:00 UTC through Wednesday at 23:59 UTC. Emissions are the protocol’s scheduled distribution of BLACK tokens. They are not the same as trading fees: emissions fund incentives for liquidity, while fees come from trades made in pools. Keeping those streams separate makes it easier to see what a pool is being offered and what its trading activity generates.

How do votes direct emissions to a pool?

Second, holders lock BLACK to receive veBLACK voting power and use it to vote on the upcoming epoch’s emission distribution. A pool with more votes can receive a larger share of the available emissions, subject to the protocol’s allocation rules. Partners can also deposit incentives for veBLACK voters to encourage support for particular pools. That gives a project a way to compete for liquidity, but the vote directs emissions; it does not itself put tokens into a trader’s wallet or guarantee that a pool will attract lasting liquidity.

What does a gauge do for a trading pair?

Third, the gauge connects an eligible pool to its emissions. It tracks liquidity that providers stake there and accounts for the pool’s share of rewards. On Blackhole, only liquidity staked in a protocol gauge earns BLACK emissions. Simply adding assets to a pair is therefore not enough. The provider must use the relevant gauge, and the pool must receive votes for emissions in that epoch.

Think of votes as setting the size of a pool’s reward budget, and the gauge as the counter that tracks eligible deposits. The analogy stops there: smart contracts apply the protocol’s rules, and the amount a provider earns depends on the reward allocation and the liquidity staked over the epoch.

Who receives fees and other incentives?

Fourth, the protocol distributes each reward stream to its specified recipient. Liquidity providers in a voted, staked gauge receive the pool’s BLACK emissions. veBLACK voters receive protocol trading fees from the previous epoch and any voter incentives offered for the current one, in proportion to their locked amounts. These are different roles and different payments: voting helps direct emissions, while staking eligible pool liquidity earns them.

• Check that the pair has an active gauge.
• Check whether it received votes for the current epoch.
• Stake liquidity in that gauge to qualify for its emissions.
• Read the pool’s reward terms separately from its trading fees.

The practical takeaway is simple: votes direct the emissions budget, and gauges route eligible rewards to staked liquidity. A high reward allocation can attract deposits, but it does not by itself show how much trading activity a pair has or what fees it will generate. Compare those measures separately before choosing where to provide liquidity.