Introducing Bribe to the Aave Community: Everything you need to know about Bribe Protocol
Bribe aims to revolutionize decentralized governance (dGov) with incentivized protocol participation. We recognize that governance markets exist, but whales are the primary beneficiaries. Bribe addresses this problem by introducing a transparent marketplace (VEV) for the value of governance tokens as voting mechanisms and DAO governance decisions. This is decentralized governance as it was meant to be — participatory, market-driven, and accessible on all platforms.
TLDR;
- Bribe is a DeFi protocol that pays DAO token holders to govern
- Aave is our first protocol integration — we are ecstatic to bring bribing to the ecosystem!
- Depositors can stake their governance tokens in Bribe pools to earn USDC
- Bidders borrow the staked votes to propose, support or reject governance proposals
- You can stake stkAAVE in the Aave Bribe pool for additional yield — stkAAVE stakers continue to earn APY from their AAVE staked in the Safety Module
- Bribe offers flexible staking — remove your tokens at any time, including during the proposal period
Governance markets are inherent to DeFi. This is because influence in governance is distributed through tokens which can be bought, sold, lended, borrowed, and priced. It follows that governance outcomes can also be bought and sold. Due to the early stage of development for many token markets, large sums of governance tokens required to “buy” DAO outcomes are not typically available on open markets like Aave or Compound. Instead, these deals tend to happen over-the-counter, off-chain, between trusted counterparties. In short, bribery already happens in DeFi. See Compound for a recent example.
While this practice may discomfort some users, the problem is not bribery itself — Bribe Protocol would argue that many governance decisions can and should be fairly priced on the open market — but that most protocol users are left out.
Bribe is not the first to recognize this phenomenon, and, as such, we have seen a number of DAO specific bribery protocols emerge in recent months — most of which have proven to be quite lucrative for their underlying DAOs. Votium, Convex, and Curve Finance, for example, have been successful in driving revenue from bribable gauges for liquidity directing. You can read more about bribery in the Curve ecosystem here.
Bribe is different because we are protocol-agnostic. We build Bribe pools for DAOs to improve their governance by coordinating retail voters into powerful coalitions up for auction. Using the Bribe app (app.bribe.xyz), depositors stake their governance tokens in protocol-specific Bribe pools to earn income. Bidders borrow the staked votes to support or reject governance proposals. They can access the voting power of our pools with USDC, rather than accumulating large amounts of DAO tokens. Now, anyone can participate in governance markets, not just whales.
Bribe x Aave
Our first protocol integration is Aave. To reiterate, depositors stake their governance tokens (in this case, AAVE and/or stkAAVE) in the Aave Bribe pool for rewards, while bidders compete in an auction to borrow all of the staked votes to support or reject one Aave Improvement Proposal (AIP) in a given timeframe (usually 1 week).
Revenue for voters is based on bid values and the amount of governance tokens staked in Bribe. For example, when $60M of AAVE is staked in the Aave Bribe pool and a $100K bid is offered, the price per vote would be approximately $0.36. The price per vote reaches $3.60 when $1M is bid (compared to a market price of ~$215 for AAVE). For comparison, the recent average price per vote in bribes for veCVX, the governance token for Convex Finance, was $0.87689 on Votium (compared to a market price of ~$40 for CVX).
We are ecstatic to bring bribing to the Aave ecosystem, and, in particular, to provide unprecedented yield opportunities for stkAAVE. Please note, depositors of stkAAVE will continue to earn APY from the AAVE they have staked in the Safety Module, and there are no opportunity costs associated with participating in the Aave Bribe pool with stkAAVE.
Bribe also offers flexible staking. As an AAVE or stkAAVE staker, you can stake your tokens in Bribe and remove them at any time, including during the proposal period. Tokens will not be locked in Bribe hence users can unstake at their convenience. AAVE and stkAAVE holders retain ownership of their tokens at all times.
There are no fees for voters who deposit governance tokens in one of Bribe’s pools. Rather, fees (set at 6%) on winning bids are directed to the protocol treasury to fund long-term development. 10% of each winning bid is sent to BRIBE stakers in protocol-specific Bribe pools who may themselves be users of the platform (ie 10% of each winning bid for use of the Aave Bribe pool is allocated to users who stake BRIBE in the Aave Bribe pool). The remaining 84% of each winning bid is distributed as USDC earnings to governance token stakers.
Bribe Protocol differs from other bribery services in one crucial way: all of the votes staked in a Bribe pool vote together in the direction indicated by the highest bid (for Aave governance proposals, either to support or reject). We recognize that those who wish to participate in governance markets do not need just a handful of extra votes, they need significant voting power to meaningfully influence the outcome of a proposal. Bribe’s voting coalition model offers this, thereby warranting higher incentives (bribes) for users who stake their governance tokens in a Bribe pool.
The Bribe use case for stakers is undeniable: those who seldom wish to participate in protocol governance can now use their tokens to do so through Bribe, and get paid in the process. Token holders simply stake, wait, and earn. Meanwhile, incentivized users bid to borrow voting power so they can influence a governance decision of their choice. This begins with Aave but will soon expand to other DAOs, so that Bribe can offer opportunities for rewards to governance token holders across DeFi.
How It Works
For depositors (voters):
- Stake — Depositors stake their Aave governance tokens (AAVE and/or stkAAVE) in the Aave Bribe pool, a valuable coalition strong enough to influence proposal outcomes
- Wait — The highest bidder borrows all of the votes in the Aave Bribe pool to support or reject a governance proposal
- Earn — USDC (from the winning bid) and BRIBE tokens are distributed to stakers in the Aave Bribe pool as income
For bidders (bribers):
- Enter — Enter the Aave Bribe pool on app.bribe.xyz
- Bid — Input the amount you wish to bid and how to vote (YAY to support, NAY to reject). Place your bribe
- Vote — Voting power will be directed on behalf of the highest bidder
Conclusion
Bribe allows users to stake AAVE and/or stkAAVE in the Aave Bribe pool, thereby providing retail value for stkAAVE. The associated voting power is auctioned, and bidders who want to influence the outcome of specific Aave Improvement Proposals compete to direct Bribe’s votes within a given timeframe. The highest bid is then distributed through the pool as income for stakers. Now, users can earn USDC and BRIBE rewards from their stkAAVE, rather than letting these tokens sit idle in their wallets. This is the ethos of Bribe, incentivizing governance participation with a revolutionary vote-to-earn model.
Bribe is best used as part of a well-balanced and active delegation strategy. For more information, visit:
