Setting up Sri Krishna icon at Udupi

The popular story associated with the setting up of the Krishna icon and the composition of the dvadasha stotra is as follows:
One morning Acharya Madhva was on the seashore performing his rituals when he saw a ship in distress, wobbling violently in the stormy waters. He waved his upper cloth and calmed the storm. When the grateful captain of the ship offered him the entire contents of the ship, he declined to accept anything except three mounds or lumps of gopichandana that had been used as ballast. With his divine vision, he saw in one of the lumps a beautiful and precious icon of shrI Krishna that had originally been worshipped by Rukmini Herself. Soaked in devotion he carried the lumps on his shoulders and walked towards Udupi, composing the dvaadasha stotra on the way. He duly consecrated the icon in Udupi and personally worshipped it for 20 years.
He initiated 8 young boys into sanyAsa and appointed them as pontiffs of 8 maThAs. He set up a unique system in which the 8 pontiffs would worship the Krishna icon for two months each in turn. This system, called paryAya, was modified in 1532 by Sri VadirAja, extending the term to two years per pontiff.

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  3. Madhvacharaya on wikipedia