Pioneering On-Chain Vote Incentivization
Exploring Votemarket's Impact on veTokenomics
🌟 Overview
Votemarket is a platform that incentivizes voters to cast votes for specific gauges, influencing reward inflation in veTokenomics protocols. This concept, central to the Curve Wars, has been widely adopted. Stake DAO implemented Votemarket entirely on-chain for maximum transparency and efficiency.
With over $30M in incentives distributed across 2+ years, Votemarket has become a trusted solution for vote incentivization in protocols like Curve, Balancer, Frax, FXN and PancakeSwap.
💫 Key Features
- Full Transparency: All operations and data are recorded on-chain, ensuring complete visibility and auditability
- Trustless Design: Smart contracts execute automatically without intermediaries or manual intervention
- Permissionless: Anyone can create campaigns or became eligible for rewards as a voter
- Composable: Integrates seamlessly with existing veToken systems and DeFi protocols
🚧 L1 Architecture Trade-offs
On-Chain Limitations
Votemarket requires weekly claims because gauge weights are updated weekly (opens in a new tab). During network congestion, gas costs often exceed rewards. Also, being fully on-chain on Ethereum limits new feature development due to gas costs. For example, automatic top-ups on gauges, as extra rewards, for unclaimed rewards would greatly improve incentivization efficiency.
The new Votemarket cross-chain architecture preserves on-chain advantages while addressing these limitations. More details about it are available in the Votemarket v2 whitepaper