Vote Escrow Models

Vote escrow models are a governance structure where users lock their tokens for a specific period to receive non-transferable voting power. The longer the lock-up period, the greater the voting weight, which creates a strong incentive for participants to act in the long-term interest of the protocol.

This model, popularized by Curve Finance, aligns the incentives of the voters with the protocol's sustainability and prevents short-term speculation. It also helps to mitigate the impact of flash loan attacks, as the attacker would need to lock their capital for a significant time.

By creating a dedicated class of long-term stakeholders, vote escrow models promote stability and reduce the volatility of governance decisions. This structure is a cornerstone of modern DeFi governance, providing a proven way to align incentives and secure the decision-making process against bad actors.