I’ve written extensively on the issue pertaining to the economics of DAO vote buying.
While it predates the existence of LobbyFi It may offer some useful insights into the ongoing debate. In it I argue that the solution ought to be akin to the flashbots model for decentralizing of MEV profits and that to prevent security vulnerabilities the DAO ought to embrace vote buying but through competition between buyers and with profits returned to the DAO itself via balancing supply and demand.
The general idea is that the solution is to make the market more transparent through decentralizing the profits and reducing barriers to entry for both buyers and sellers. By making it easier for competitors to emerge and sell votes, it brings down the cost for buyers and reduces centralization via a race to the bottom. Meanwhile, the lower barriers to entry allow more people to buy votes which raises prices back up to equilibrium, supply meeting demand. Combine this with better transparency mechanisms and some cryptographic guarantees and you have all that you need. Just as MEV can’t be solved because of off-chain collusion, the solution isn’t to try and get rid of it, but to make the market more efficient and decentralized through open competition.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We agree strongly with points raised by @0xDonPepe and others that platforms like LobbyFi make vote-buying transparent, which can be beneficial. For instance, during the OpCo elections, transparency allowed us to identify who bought votes and for whom clearly. Without this, the DAO would have remained unaware of these actions, making the governance process vulnerable to hidden manipulation. In this sense, transparency is essential as it helps the community stay informed and respond accordingly.
However, as mentioned in the post and echoed by @pedrob, there’s a real concern that openly allowing vote-buying could damage the DAO’s perceived legitimacy. If critical decisions or positions appear purchased rather than earned, trust in our governance weakens.
Rather than banning vote-buying, we should focus on strengthening our governance structures and aligning incentives to minimize its negative impact. For instance, incentivizing participation through ARB staking or offering rewards for active governance participation, as suggested by @TodayInDeFi, could discourage token holders from selling their voting power by providing competitive incentives aligned with the DAO’s interests.
The current design gives vote-buyers unfair leverage during active votes, a point well-raised by @Hawheik. It’s worth exploring adjustments to ensure fairness, possibly by limiting the timing or method through which voting power shifts during an ongoing vote. Clearly articulated guidelines around vote-buying, particularly during sensitive elections, could help set necessary expectations. Also, the delegates and candidates should ideally commit to not actively soliciting paid votes, thereby reinforcing trust and integrity.
Finally, increasing overall voter participation and active delegation, would naturally diminish the impact of purchased votes and greater organic involvement will help safeguard decentralization and legitimacy long-term.
I believe this is a big fundamental shift for DAOs and this discussion is of upmost importance.
First, there were already great takes that I agree with starting with Olimpio:
The bribery genie is out of the bottle, and as Olimpio noted, it’s a new cat-and-mouse problem akin to MEV. Squeeze one side, and the incentives will find another way to emerge.
Secondly, as Dennison from Tally said:
In short, the DAO is waging an unwinnable battle against unyielding market forces.
So, the DAO could try to ban Lobbyfi but this goes against $ARB token holders as they can freely choose where to use it and to who to delegate.
Not a viable option.
The problem is that DeFi DAOs already struggle with voter apathy, insider influence, and vote concentration. Lobbyfi isn’t the core issue but the DAO itself needs better incentives to get more holders involved.
I believe a total revamp of tokenomics is needed either via staking, or even introducing veTokenomics by Curve. It will take time but incentives need to be aligned with ARB token holders. Simply serving as a voting token with no real financial gains is not an attractive solution.
So, I want to see innovative tokenomics approach being discussed and lobbying issue will subside in importance.
Vote-buying is indeed an interesting and complex topic, and due to its controversial nature, it must be openly discussed.
To directly respond to the question posed:
Although banning vote-buying entirely is challenging due to inevitable workarounds, the practice contradicts the Arbitrum DAO’s established code of conduct in some circumstances. Specifically, it conflicts with existing policies such as:
and
The ethical underpinning of these policies clearly aims to ensure fairness and impartiality in voting processes. Given this intent, we argue that vote-buying should be treated similarly to self-voting, particularly in elections. We propose explicitly updating our code of conduct to include rules around vote-buying, specifically:
Delegates should avoid vote-buying if it creates a conflict of interest.
Delegates engaged in vote-buying must not solely vote for themselves; votes should be evenly weighted among multiple candidates to reflect a fair and balanced election, as mentioned by JoJo:
This stance clearly signals that existing delegation rules apply equally to purchased votes, promoting transparency and fairness.
In the longer term, the fundamental issue may not be vote-buying itself but rather the disproportionate influence held by entities like LobbyFi, currently the largest delegate in the DAO with nearly 20M votes. As JoJo highlighted:
We strongly agree. Addressing vote-buying directly is necessary in the short term, but enhancing overall delegate engagement and voting power remains the sustainable long-term solution.
There’s already been plenty of discussion around why banning LobbyFi isn’t the optimal path forward, so we won’t rehash those arguments. Instead, we want to zero in on the actual risk vector: the effectiveness of LobbyFi’s strategy during elections — especially in weighted elections with shutters, as JoJo rightfully mentioned here:
We initially had some ideas on the path forward. Like:
Pre-lockups before elections (tied to ARB staking)
Automatic negative vote structure ( in Lobby’s case, that would be - 19.3M to be cast against whoever they vote for)
However, these ideas introduce significant operational overhead and can be easily gamed.
Introducing: A Vote Cap Per Candidate
We are suggesting the introduction of a vote cap per candidate mechanism. We believe a vote cap per candidate is a far more practical, adaptable, and enforceable approach.
Let’s use the recent election results as a case study. Of the 12 candidates, 3 were to be selected.
The ~20M VP allocated to cupojoseph wasn’t enough to secure a top-three spot.
However, it pushed him into the top five.
This might not seem alarming in a 3/12 setup, but in a 5/12 scenario, this kind of influence could be decisive. That opens the door for vote-buying to effectively place candidates, even those misaligned with the community.
How the Cap Would Work
The DAO sets a maximum amount of VP that can be allocated to any single candidate per election.
Any votes exceeding that cap would be reallocated to the voter’s remaining choices, thus treating it as a soft abstain.
This limits the power of concentrated voting blocs while maintaining freedom of participation.
For example, having a 10M cap for the OAT elections in a 5/12 scenario would have forced LobbyFi to split the rest of their VP to the other candidates. Cupojoseph, in this case, would have still made it to the top five, but we are sure only Lobby’s vote wouldn’t have pushed him through.
Making it Dynamic
We recognize this cap can’t be static. It should adjust based on election parameters — number of candidates, seats, total VP, etc. That said, it’s possible to derive a simple formula to keep this process seamless and predictable.
As a final note, while ideating on next steps around this, we tried as much as possible to look at things from a wider spectrum (considering others who might want to implement something similar to what LobbyFI is already doing). Also, we tried not to get so hung up on ARB staking playing a major part in fixing this, because although it would be of great help, making 5 ETH per DAO election looks appetizing enough for individuals to both stake and participate in lobbying.
This cap vote mechanism offers a flexible safeguard that targets the actual vector of abuse — excessive concentration in a single candidate — without introducing undue complexity. We believe it is worth further discussion and modeling as we explore how to preserve the legitimacy of the DAO’s elections.
This recent event in a series of very interesting dynamics over the last few months has created a marketplace where governance rights can be commodified, effectively allowing any well-capitalized actor to influence proposals without holding a proportionate stake in the network. While the service is transparent about its operations, the underlying issue is that this dynamic may distort outcomes and weaken the legitimacy of the DAO’s decisions.
In line with many of the prior comments, there’s a fine line between incentivizing engagement and opening the door to manipulation. If voting can be bought cheaply, decisions may reflect the interests of a few opportunistic entities rather than the broader community. This isn’t just a theoretical concern—it’s a real risk to the values of decentralization and credible neutrality. While some argue vote-buying is difficult to prevent, especially if done off-chain, it’s not a reason to ignore the issue. In fact, the existence of open marketplaces like LobbyFi is a call to action: it’s time to revisit governance assumptions, explore quorum changes, create disincentives for short-term power accumulation, and invest in voter education to foster more deliberate and values-aligned participation.
Would be very interested in seeing staker up live soon and address maybe some of the things discussed prior.
Thank you to the Arbitrum Foundation for initiating this important discussion and for presenting the issue with clarity and transparency.
We agree vote buying presents a threat to the integrity of informed decision-making within DAOs. The purpose of a decentralized governance system is to enable engaged, informed delegates to steer the protocol toward long-term success. Mechanisms that commoditize voting rights can undermine this foundational principle, particularly when votes are acquired without any alignment to governance values or context.
That said, based on our current assessment, and in alignment with the Governance Attack Report published by the ARDC, we do not believe vote buying currently represents an existential or systemic threat to Arbitrum governance. The ability for such behavior to materially alter outcomes is limited by the broader level of community engagement. In particular, higher participation rates among long-term aligned stakeholders significantly dilute the potential influence of purchased votes, as seen in the OpCo elections.
To that end, we view initiatives like Governance Staking by Tally as an important step forward. By activating previously idle voting power and encouraging more consistent participation from aligned token holders, we can raise the bar for influence and make governance more robust overall.
Rather than calling for an outright ban or punitive action against vote buying, we suggest implementing governance adjustments that incentivise balanced voting like @WinVerse 's caps on election support from single entities, which limits the impact of a concentrated set of votes for sale.
In our view, this is a moment for thoughtful refinement, not panic. We encourage further community discussion around exploring practical mechanisms that balance permissionless voting with high quality decision-making.
Vote buying-as-a-service is a nuanced and evolving issue in DAO governance. Setting aside ideological positions, we’re closely monitoring the upcoming DefiLlama research report—anticipated this week—as it could provide a critical framework for how Arbitrum might navigate LobbyFi’s presence in the ecosystem.
Our perspective is one of cautious optimism. Vote buying introduces a potential governance attack vector: if renting voting power becomes significantly cheaper than acquiring or even borrowing ARB—as GFX noted—it undermines both the security of the DAO and the perceived legitimacy of its decisions. However, an outright ban on vote buying seems impractical and potentially counterproductive. If these activities are pushed underground, they’ll become harder to detect and regulate, increasing the risk to DAO integrity. LobbyFi operating transparently, engaging in forum discussions, and publicly providing rationale for design decisions is far preferable to opaque, backchannel systems.
Instead of focusing solely on restriction, the DAO should address the structural conditions that make vote buying appealing in the first place. For Arbitrum to remain truly inclusive—where power can be earned through contribution and merit—we must acknowledge and fix imbalances in how influence is distributed. Many contributors may feel that renting voting power is the only viable path to be heard. That signals a deeper issue.
We encourage the DAO to invest in long-term structural improvements:
increasing grassroots delegation, exploring tools like Tally’s staking module to direct delegations toward trusted delegates, and making participation pathways clearer and more accessible to new contributors.
The key question we pose to the DAO is this:
What structural imbalances within Arbitrum governance are driving contributors to believe that purchasing votes is necessary to gain influence?
We appreciate the thorough discussion around vote-buying and platforms such as LobbyFi. Ultimately, we do not support the regulatory approach aimed specifically at platforms like LobbyFi.
The primary issue we should focus on isn’t vote-buying (the transfer of voting power) itself, but rather the fact that such practices may enable malicious actors to distort DAO decision-making at relatively low costs. In other words, the central risk lies in the cost-effectiveness of governance attacks rather than in the mechanics of vote buying per se.
We strongly agree with the following sentiment shared by @jameskbh:
Thus, the core of our defensive measures should aim at significantly raising the capital costs required for any malicious attack, thereby effectively deterring such behavior.
One effective method for increasing attack resistance would be mobilizing more ARB tokens into decentralized voting. We’ve reviewed the proposed measures and offer our evaluation:
Strategic delegation of DAO Treasury ARB to active delegates aligned with DAO values:
Evaluation: Strengthens resilience against governance attacks by diversifying voting power.
Concerns: Complexity in objectively and fairly choosing delegates.
ARB Staking:
Evaluation: Positive, as it can enhance participation and thus DAO resilience.
Concerns: Staking incentives alone cannot eliminate “bribery” (especially off-chain or through undetectable methods). Incentives for greater capital efficiency will persist, potentially leading to alternate forms of vote buying such as airdrops or off-chain promises. Therefore, while useful, staking should not be viewed as an all-encompassing solution.
Evaluation: Potentially effective in preventing short-term manipulation just before voting.
Direct interventions on platforms like LobbyFi (dialogue, control, or bans):
Evaluation: Might temporarily mitigate immediate risks from specific malicious behaviors.
Concerns: Such measures don’t fundamentally solve the issue, as @Vertex_Protocol noted clearly:
Additionally, banning such platforms could push activities into opaque environments, requiring restrictive measures like voter KYC, contradicting our commitment to a permissionless system. We align with @olimpio’s perspective:
Lastly, we propose exploring mechanisms that explicitly increase the capital cost for short-term governance manipulation. For example, implementing multipliers on voting power tied to longer lock-up periods or staking durations could be beneficial. This approach has precedents and could effectively raise the threshold required for malicious interventions.
We believe combining these strategies, especially strategic delegation, staking incentives, and lock-up-based voting multipliers, would significantly reinforce the robustness and fairness of our governance processes.
Not only nuanced and evolving. These systems are fully customizable to anyone’s liking. Let’s remember that. We can make or request anything (from LobbyFi and/or others). For the record, I built Compound’s delegate marketplace (code: 2025). Live soon after OpenZeppelin’s audit.
There will always be some appetite for passive delegation which can and will be incentivized (behind closed doors or for everyone to see is what makes the difference). It’s true with more supply activated (staking, ARB collateral, etc), there’ll be less available to allocate.
All around it’s positive to see the community active and deeply engaged.
Thank you for this, @Tane. Your assessment is insightful and highlights some very important nuances.
However, after reviewing the broader discussion and the strategies proposed to reduce vote-buying risks, I have some reservations regarding this point you raised:
While strategic delegation could indeed strengthen governance, don’t you think delegating Treasury ARB to a select few could unintentionally alienate other active delegates who feel equally deserving but were overlooked?
Of course, governance isn’t about pleasing everyone, but perceptions of favoritism could still undermine trust in the process if clear criteria are not established, leading to issues like this.
To mitigate this, perhaps we could develop transparent, objective metrics for allocation (e.g., voting participation rate, forum engagement, proposal contributions, delegate reports). We could also set qualification and disqualification requirements ahead of time, which might help ensure fairness and strengthen legitimacy in how delegations are distributed.
I’m curious to hear your thoughts on whether combining strategic delegation with such clear frameworks could address this concern effectively.
I thought I would weigh in on this seeing as I bought the votes being discussed here. In my opinion, any attempt to stop people from buying votes here is foolish at best and atrociously self interested at worst. As has been pointed out already, it would be literally impossible to totally prevent vote buying. ARB tokens are openly bought and sold, and with them their votes. How you would distinguish someone buying a large quantity of ARB to sway an incoming election and someone buying a large quantity of ARB to bolster their investment I do not know, and I do not think we need to know. If people want to buy votes they will find a way to do so. The only thing that something like lobbyfi does is lower the barrier to entry by making such a system accessible. Attempt to ban this practice and you won’t stop vote buying, you will just ensure that only those with money can engage with it.
On the concept of fairness, this is not a democracy. In practice this is a form of partnership. The more you put in, the more power you have in the partnership. That is the system of fairness we are currently working with here. It isn’t necessarily fair that some people have millions of votes while others have a dozen, but that is the system that has been set up here. I would point out that you can literally buy voting rights in C-Corps. If you restrict this, you are literally being more restrictive than the systems which have already been set up for recognized organization. I don’t know how that squares with everyone’s concept of progress but I thought I would throw that out there.
Finally, a lot of this discussion has already happened over the last few centuries. The ethics and effects of vote buying and selling have been debated since democracy was created. To simplify this long history, the consensus is generally that within a democracy vote buying causes a multitude of problems and is likely not preferable (no matter what your libertarian friends say.) However, as I said, this isn’t a democracy and unless you would like to change that I would caution against any attempts to ban this.
Vote buying is not new; it long predates the existence of DAOs. Attempting to suppress it now feels counterproductive, and the outcome will likely differ from what the Arbitrum Foundation (AF) hopes for.
We align with @0xDonPepe’s perspective, especially on the transparency and traceability that LobbyFi introduces:
This issue has only sparked concern because a token holder chose to delegate their 18.9M voting power (VP) to earn yield, far exceeding the VP LobbyFi initially offered.
To be clear: obtaining voting power is not exclusive to LobbyFi. It happens through various means, including:
• Kickbacks between delegates
• Purchasing tokens directly from the market
• Renting voting power via protocols like Aave (as noted by GFXlabs)
• Behind-the-scenes collusion to benefit select parties
The core problem isn’t LobbyFi. It’s the persistent decline in the ARB token price and the token’s broader lack of utility.
If the DAO sees LobbyFi as a risk, the solution isn’t censorship, it’s reform. Some actionable suggestions include:
• Raising quorum thresholds
• More evenly distributing VP among aligned delegates
• Launching a staking mechanism (ideally with built-in delegation flow)
• Engaging directly with LobbyFi to improve safeguards (e.g., preventing single actors from dominating VP, while offering feedback to enhance monetization)
• Increasing the base price for instant buys on the platform
LobbyFi hasn’t introduced heightened risk; it’s simply made existing practices more visible. Rather than retreating into opacity, we should take this opportunity to create better guardrails, increase resilience, and build systems that reflect the DAO’s commitment to openness.
