Why Vote Buying is Inevitable in Permissionless Systems

Token holders (principals) are rationally apathetic. Voting power is cheap to acquire but expensive to inform. This creates a vacuum for professional voters (agents) who sell their influence.\n- Rational Ignorance: Cost to research proposals > marginal voting reward.\n- Delegated Cartels: Entities like Lido or Coinbase Custody vote on behalf of $30B+ in staked assets.\n- Inevitable Outcome: Votes become a commodity, not a civic duty.

Maximal Extractable Value isn't just for block builders. Any on-chain action with economic consequence creates arbitrage. Governance votes that move markets are a prime target.\n- Front-Running Proposals: Sniping token buys before a treasury investment vote passes.\n- The Curve Wars: Protocols like Convex and Stake DAO amassed $CRV voting power to direct ~$4B in liquidity incentives.\n- Blurred Lines: Distinction between 'vote buying' and 'legitimate delegation' vanishes.

Robin Hanson's prediction market-based governance accepts vote buying as a feature. The market price is the vote, efficiently aggregating beliefs. Augur and Gnosis experimented with this model.\n- Embrace the Market: Votes are prediction shares on proposal outcomes.\n- Efficiency Over Ideology: Capital allocates to the highest-probability outcome.\n- The Ultimate Form: Permissionless systems naturally evolve towards explicit, rather than covert, markets for control.

Governance tokens on DEXs like Uniswap or Compound are financial assets first. Their price reflects speculative value, not voter conviction. This creates a fundamental misalignment: the entity with the highest financial stake (a whale or fund) is rarely the most informed user.

• Separation of Power & Profit: Voting rights are bundled with a tradeable asset, divorcing influence from platform usage.
• Low Cost of Acquisition: Tokens can be borrowed via DeFi (e.g., Aave, Compound) for a single voting cycle, enabling cheap, temporary control.
• The Free Rider Problem: Small holders rationally sell their voting power rather than incur the cost of informed participation.

Maximal Extractable Value demonstrates that any arbitrage opportunity in a permissionless system will be exploited. Vote buying is simply political MEV.

• The Dark Forest Analogy: Just as searchers scan mempools for profitable trades, funds now scan governance proposals for profitable outcomes.
• Case Study: Curve Wars: Protocols like Convex Finance and Stake DAO explicitly aggregate CRV votes to direct liquidity emissions, creating a clear market for influence.
• Inevitability Proof: If a vote outcome can create more value for Party A than the cost of buying the votes, a rational market participant will execute the trade.

Fighting vote buying is futile. The solution is to make it transparent, fair, and aligned via cryptoeconomic design, as seen in Futarchy and Robin Hood DAOs.

• Futarchy (Proposed): Use prediction markets to decide policy; let traders "buy votes" on outcomes, profitably betting on correct decisions.
• Commit-Reveal & Minimum Lockups: Increase the cost of attack by requiring vote tokens to be locked for extended periods, as with veToken models.
• Delegated Markets: Formalize delegation into a liquid marketplace (e.g., Element Finance's Governor) where delegates stake reputation and can be easily fired.

Attacks on MakerDAO and other DeFi protocols show that any on-chain data feed with monetary value will be gamed. Governance votes are simply slower, higher-latency oracles.

• Historical Parallel: The 2020 "Black Thursday" event revealed how oracle price feeds could be manipulated to trigger liquidations; governance votes are subject to the same Sybil and bribery attacks.
• Cost-Benefit Calculus: The security budget of a protocol is the cost to attack its weakest consensus layer, which for many DAOs is the token-weighted vote.
• Mitigation Path: Hybrid models combining token voting with proof-of-personhood (e.g., BrightID) or specialized councils are not a fix but a re-pricing of the attack.

Governance tokens are financial assets first, voting tools second. This creates a principal-agent problem where token holders' financial incentives (sell for profit) diverge from protocol health (vote for long-term good).\n- Example: A whale can borrow tokens via Aave or Compound to swing a vote, then sell the position.\n- Result: Votes are for sale to the highest bidder, decoupling voting power from genuine skin-in-the-game.

Align incentives by making governance costly to acquire and painful to misuse. This moves beyond simple token locking.\n- Curve's veToken Model: Locking CRV for veCRV boosts yields and voting power, but exit is slow (up to 4 years).\n- Futarchy & Prediction Markets: Implement decision markets (e.g., Augur, Polymarket) where voters bet on policy outcomes, financially penalizing wrong votes.\n- Result: Raises the capital and time cost of attack, making casual vote buying economically irrational.

On-chain voting gas costs are trivial relative to proposal stakes. This enables sybil attacks and vote farming where influence is cheaply manufactured.\n- Example: An attacker can spin up thousands of wallets with dust tokens to sway a Snapshot vote.\n- Result: Governance is gamed by those willing to pay the trivial transaction fees, not those with the most legitimate stake.

Impose meaningful economic or identity costs to vote. This filters out low-stake sybils and forces buyers to absorb real risk.\n- Vitalik's "Soulbound Tokens": Non-transferable identity (e.g., BrightID, Worldcoin) limits one-vote-per-person.\n- Conviction Voting: Voting power increases linearly with the time tokens are committed to a choice.\n- Result: Increases the attack surface and capital required for vote buying, making it detectable and expensive.

Delegated Proof-of-Stake (DPoS) and token delegation pools (e.g., Lido, Rocket Pool) centralize voting power with a few entities. These delegates become prime targets for bribery.\n- Example: A protocol treasury grant proposal can offer a kickback to large Lido node operators for their votes.\n- Result: Vote buying shifts from a diffuse market to a centralized backroom negotiation, undermining decentralized ideals.

Move beyond subjective voting. Let markets objectively determine the best outcome, or let users "vote with their feet."\n- Futarchy: Implemented in Tezos upgrades, uses prediction markets to decide proposals based on projected token price impact.\n- Exit-Over-Voice: Inspired by Radicle and Moloch DAOs, allows members to exit with treasury funds if they disagree, a direct economic signal.\n- Result: Reduces the value of buying votes by making governance outcome-based and exit-driven, not opinion-based.