Vote Buying and Bribery

Vote buying and bribery in governance occur when an actor offers financial incentives to token holders in exchange for their votes on specific proposals. This practice distorts the democratic process, as voters may prioritize personal gain over the health and security of the protocol.

In competitive DeFi markets, bribes are often used to steer liquidity mining rewards or to pass changes that favor a specific interest group. While this can be a legitimate way to attract capital, it creates a market for governance power that can lead to long-term systemic risks.

If the bribe is large enough, it can effectively override the community's intent, leading to a form of governance capture. Protocols must be aware of these dynamics and design incentive structures that discourage the commodification of votes.

Transparency in voting patterns can help the community identify when bribery is taking place.