Vote Selling

The core mechanism involves a token holder (delegator) transferring their voting power to another party (delegate) in exchange for a direct financial payment or a share of future rewards. This is distinct from free delegation based on ideological alignment. The transaction is often facilitated by a smart contract that escrows tokens and automates payment distribution.

• Example: A DAO member rents out their voting power for a specific proposal in return for a flat ETH payment.

Vote selling agreements are often time-bound or proposal-specific, unlike indefinite delegation. A delegator may sell their vote for a single governance snapshot or a defined epoch. This creates a market for voting power that fluctuates with the importance and contentiousness of individual proposals.

• Key Feature: Enables mercenary voting where capital flows to the highest bidder for a discrete decision, rather than supporting a long-term platform vision.

This practice legally and technically decouples the economic stake (token ownership) from its associated governance rights. The original holder retains ownership and potential staking rewards, while ceding control. This separation is a fundamental deviation from the "one token, one vote" ideal and can lead to a principal-agent problem where the voter's incentives are not aligned with the token's long-term value.

While the vote itself is recorded on-chain, the bribery agreement and payment are frequently coordinated off-chain via private messages, dedicated platforms, or encrypted channels to avoid scrutiny. This opacity makes it difficult for protocols to detect and mitigate the activity, as the on-chain delegation event appears normal. Some platforms use commit-reveal schemes or cryptographic proofs to add a layer of deniability.

Specialized platforms and smart contract systems have emerged to formalize vote selling markets. These act as clearinghouses, matching sellers of voting power with buyers, setting prices, and ensuring execution. They reduce counterparty risk and can aggregate fragmented voting power, increasing market efficiency but also legitimizing and scaling the practice.

• Related Concept: Vote Escrow models, where tokens are locked for time to gain voting power, create a natural substrate for rental markets.

The primary systemic risk is governance capture by well-funded, short-term actors who can cheaply amass decisive voting power without a long-term economic stake. This undermines the crypto-economic security model of Proof-of-Stake and DAOs. It can lead to malicious proposals that drain treasuries, change fee parameters, or approve harmful upgrades, as the voters bear no long-term cost for their decisions.

Platforms where token holders can explicitly sell their voting rights for a specific proposal or a period of time. This creates a secondary market for governance influence.

• Example: A voter lists their tokens for sale on a marketplace, specifying a price per vote for an upcoming DAO proposal.
• Mechanism: The buyer receives temporary voting power, often via a delegation or vote escrow mechanism, to cast the vote as they choose.

A common implicit form where token holders delegate their voting power to a third party (a "delegate" or "protocol politician") in exchange for a share of the rewards that delegate earns.

• How it works: The delegate votes on proposals, often earning protocol incentives or bribes from interested parties. They then redistribute a portion of these earnings to their delegators.
• This blurs the line between delegation for expertise and direct payment for voting power.

Vote selling as a vector for governance attacks. An attacker can borrow or buy a large number of tokens temporarily (flash loans), use them to pass a malicious proposal, and then sell the tokens back.

• Key Risk: This exploits the separation of ownership and control. The attacker has no long-term stake but can execute a short-term governance takeover.
• Defense: Protocols implement time-locks, quorums, and guardian multisigs to mitigate such short-term attacks.

In Proof-of-Stake networks, large staking pools or exchanges (e.g., Coinbase, Binance) aggregate user tokens. The pool operator controls the voting power for consensus and on-chain governance.

• Implicit Sale: Users effectively "sell" their governance rights for staking rewards and convenience. The pool's votes may not align with individual stakers' interests.
• This leads to centralization of governance power, as a few large entities can dominate the voting process.

Financial derivatives that speculate on governance outcomes, creating indirect incentives for vote selling. A trader with a large position in a governance futures contract has a financial motive to influence the vote to profit.

• Example: A prediction market offers shares on "Will Proposal X pass?" A holder of "Yes" shares could buy votes to increase the likelihood of passage.
• This creates a synthetic form of vote buying, where economic interest is decoupled from direct token ownership.

The legitimate transfer of voting power to a trusted third party, such as a delegate or governance committee. This is a core feature of many delegated proof-of-stake (DPoS) and liquid democracy systems, designed to improve participation and expertise in governance. It differs from vote selling because the delegator retains ownership of the underlying assets and the delegate is expected to vote in the delegator's best interest.

Platforms or mechanisms that explicitly facilitate the exchange of tokens or value for votes. These are the primary enablers of vote selling. Key examples include:

• Votium: A platform for Convex Finance and Curve Finance gauge weight bribery.
• Hidden Hand: A marketplace for directing Aura Finance bribes.
• Paladin Quest: A service for purchasing votes on Snapshot proposals. These markets use smart contracts to escrow funds and distribute them to voters who support a specific proposal.

A cryptocurrency that confers voting rights within a decentralized autonomous organization (DAO) or protocol. These tokens, such as UNI, COMP, or AAVE, are the asset whose voting power is sold or rented. Their value is derived from both governance utility and potential fee-sharing rights. The separation of voting rights from economic interest is what makes vote selling possible.

A governance design pioneered by Curve Finance (veCRV) that locks tokens to boost voting power and rewards. This model creates a market for vote selling because:

• Large holders (whales) lock tokens for long periods, accruing significant voting power.
• Protocols seeking incentives can bribe these veToken holders to direct emissions (e.g., gauge weights) to their pool.
• It explicitly creates a financial incentive to vote based on external payment rather than protocol health.

An attack where a single entity creates many fake identities (Sybils) to gain disproportionate influence. In governance, this can be used to amplify voting power cheaply. Vote selling exacerbates Sybil risk, as an attacker can rent votes from many small, seemingly independent holders to centralize control. Defenses include proof-of-personhood, token-weighted voting, and soulbound tokens.

A governance framework (used by DAOhaus) designed to resist manipulation, including vote buying. It uses prediction markets (called Boost) to allow proponents to signal strong support for a proposal. If a proposal is boosted, it can pass with a lower quorum. This system aims to align economic incentives with collective truth-seeking, making it more costly and complex to profitably manipulate outcomes via vote selling.