Vote Bribing

Vote bribing, or vote buying, is a strategy where a party (the briber) offers a direct financial reward to governance token holders to influence the outcome of a proposal. The primary purpose is to concentrate voting power in favor of a specific outcome that benefits the briber, such as directing liquidity mining rewards to a particular pool or approving a treasury grant. It operates on platforms with on-chain governance, where votes are transparent and enforceable.

The economic model creates a multi-party incentive loop:

• Bribers (e.g., protocols): Pay bribes (often in stablecoins or their own token) to attract votes and direct liquidity incentives to their pool, boosting TVL and fees.
• Voters (veToken lockers): Earn bribe revenue on top of their base protocol rewards (trading fees, token emissions), improving their yield.
• Protocol Treasury: Can benefit from increased activity and fee revenue, though it may face governance dilution. This turns governance power into a tradable financial asset.

While it incentivizes voter participation, vote bribing introduces significant governance risks:

• Short-Termism: Voters may prioritize immediate bribe payout over the protocol's long-term health.
• Centralization of Power: Large token holders ("whales") or coordinated groups can disproportionately influence outcomes.
• Collusion & Opaque Dealings: Off-chain deals can undermine the transparency of on-chain governance.
• Economic Capture: Proposals that generate the highest bribes, not the best technical merit, may win, potentially leading to governance attacks or misallocated resources.

• veTokenomics: The tokenomic model (vote-escrow) that enables vote bribing by locking tokens for time-weighted voting power.
• Liquidity Gauges: The smart contract mechanism on protocols like Curve that measures liquidity and distributes rewards based on vote weight.
• Governance Minimization: A design philosophy to reduce the scope and frequency of governance decisions, partly in response to bribery risks.
• Futarchy: A proposed alternative governance model where markets predict and decide outcomes, sometimes seen as a more formalized bribery market.

A concrete example is a stablecoin pool (e.g., a FRAX/USDC pool) seeking CRV incentives on Curve Finance.

1. The FRAX protocol deposits a bribe of 10,000 FXS tokens on the Votium platform for the upcoming weekly gauge vote.
2. veCRV holders see the bribe offer and, if they accept, vote to allocate CRV emissions to the FRAX/USDC pool.
3. After the vote concludes, voters who supported the winning direction claim their proportional share of the 10,000 FXS bribe from Votium.
4. The FRAX/USDC pool receives boosted CRV emissions, attracting more liquidity providers.

Some systems use non-fungible tokens (NFTs) to represent and distribute bribe rights. Voters receive an NFT that entitles them to claim a share of a bribe pool, enabling more flexible reward mechanisms and secondary market trading of bribe claims.

• Flexibility: NFTs can be traded, bundled, or used as collateral separate from the underlying voting power.
• Example: Paladin's Warden platform has used NFT-based bribe futures, allowing users to sell their future bribe claims.
• Innovation: Enables more complex financialization of governance rewards.

The competition for CRV emissions on Curve Finance is the canonical example of vote bribing. Protocols battle to direct gauge weights toward their liquidity pools to earn more CRV, creating a continuous bribe economy.

• Key Actors: Convex Finance (dominant vote controller), Frax Finance, Yearn Finance.
• Tactic: Accumulate veCRV (voting escrow CRV) to gain voting power, often financed by protocol treasury emissions.
• Outcome: A significant portion of CRV emissions is directed based on bribe payments rather than pure organic voting.

In advanced scenarios, protocols coordinate bribery across multiple governance systems to achieve a synergistic outcome. For example, a protocol might bribe voters on both Curve and Balancer to ensure its token has deep, incentivized liquidity across several automated market makers (AMMs).

• Strategy: A unified bribe campaign targeting multiple gauge systems simultaneously.
• Goal: Secure optimal liquidity conditions and emission rewards across the DeFi ecosystem.
• Complexity: Requires significant capital and coordination, often managed by DAO treasuries or dedicated working groups.

Vote bribing, also known as vote buying, is a coordination mechanism where a party (the briber) offers a financial reward to token holders in exchange for their voting power on a specific governance proposal. This is typically facilitated through bribe markets like Hidden Hand or Paladin, where bribers post rewards and voters claim them after voting as directed. The process does not transfer token ownership, only the temporary delegation of voting rights.

Bribes create a direct market price for governance influence. Common use cases include:

• Liquidity Mining Incentives: Protocols bribe veToken holders (e.g., in Curve's gauge system) to direct emissions to their liquidity pool.
• Protocol Parameter Changes: Projects may bribe to pass proposals favoring their tokenomics.
• Treasury Management: Influencing votes on treasury fund allocation or grant approvals. This mechanism allows capital-efficient actors to amplify their governance weight without acquiring more tokens.

While economically efficient, vote bribing introduces significant risks:

• Short-Termism: Voters may prioritize immediate bribe rewards over the protocol's long-term health.
• Centralization of Power: Wealthy actors can repeatedly outbid others, leading to governance capture.
• Collusion & Sybil Attacks: Bribers may collude with large token holders or create Sybil wallets to manipulate outcomes.
• Reduced Deliberation: It can bypass meaningful community debate, turning governance into a purely financial auction.

Protocols implement various defenses against malicious bribery:

• Vote Delay & Locking: Mechanisms like vote escrow (veTokens) lock tokens for long periods, aligning voter incentives with long-term success.
• Anti-Collusion Forks: The theoretical concept of forking a protocol to confiscate tokens used in malicious collusion.
• Transparency Tools: Platforms like Tally and Boardroom provide visibility into voting patterns and bribe activity.
• Quadratic Voting: Making the cost of buying votes increase quadratically, though challenging to implement on-chain.

Vote bribing interacts with several key DeFi primitives:

• veTokenomics: A token model (pioneered by Curve Finance) where locking tokens grants boosted rewards and voting power, creating the primary market for bribes.
• Bribe Markets: Platforms like Hidden Hand that act as decentralized coordination layers for posting and claiming bribes.
• Governance Minimization: A design philosophy seeking to reduce the attack surface and need for frequent, risky governance votes.
• Futarchy: A proposed alternative governance system where markets predict and decide outcomes.

A decentralized platform or mechanism where users can offer financial incentives (bribes) to governance token holders to vote a specific way. These markets create a financial layer on top of governance.

• Primary Example: Votium on Convex Finance.
• Process: Bribers deposit funds (e.g., CRV, CVX, or stablecoins) into a market contract, which distributes them to voters who supported the designated proposal.

A mechanism where users lock their governance tokens for a fixed period to receive boosted voting power and often protocol revenue shares. This creates "locked" or "ve" tokens (e.g., veCRV, vlCVX).

• Purpose: Align long-term incentives and reduce mercenary capital.
• Bribery Impact: Vote bribing often targets these large, concentrated pools of locked voting power, as they are efficient to influence.

The process where a token holder transfers their voting power to another address (a delegate) without transferring token ownership. This centralizes voting influence and is a key vector for bribery.

• Centralization Risk: Large delegates ("whales" or delegate DAOs) can amass significant power, making them prime targets for bribers.
• Example: Delegation on Compound or Uniswap governance.

Any action that subverts the intended democratic process of a DAO for personal or adversarial gain. Vote bribing is one form of governance attack.

• Other Types: Proposal spam, token whale domination, timezone attacks, and smart contract exploits of governance modules.
• Goal: To seize control of treasury funds, change critical parameters, or extract value illegitimately.

Vote bribing introduces significant governance risks that challenge the decentralized ideal:

• Voter Apathy & Plutocracy: Voting power becomes a financial asset, decoupling from project stewardship. Large holders ("whales") or aggregators can dominate outcomes.
• Short-Term Incentive Alignment: Bribes may incentivize votes that maximize immediate bribe yield over the protocol's long-term health.
• Economic Capture: A project with deep treasuries can perpetually bribe its way to preferential liquidity, creating barriers to entry.

A critical distinction exists between protocol fees and bribes in veToken ecosystems:

• Fees: Revenue generated by the core protocol (e.g., trading fees on Curve) that is automatically distributed to veToken holders and liquidity providers. This is a passive, protocol-native income stream.
• Bribes: External payments made by third-party projects to influence gauge weight votes. This is an active, external incentive to alter emission distribution. Bribes are often paid in the project's own token, while fees are in the base assets (e.g., USD, ETH).

Vote bribing intersects with broader decentralized governance mechanisms:

• Quadratic Voting: A theoretical alternative that reduces plutocracy by making vote cost quadratic to tokens held, though difficult to implement with sybil resistance.
• Holographic Consensus: A framework (used by DAOstack) that uses prediction markets to surface proposals, offering a different path for efficient decision-making.
• Rage-Quitting: A mechanism (in Moloch DAOs) allowing members to exit with their share of the treasury if they disagree with a decision, acting as a check on governance.