Bribe Raises $4m for Reimagined DAO Model

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The governance of a decentralized finance (defi) protocol by its own community of users has become a standard feature of the blockchain space in recent years. Governance tokens form a crucial backbone of decentralised autonomous organizations (DAOs), allowing users to guide the direction of a given platform in a way they find most beneficial.

In practice, such noble intentions often fail to have a substantial impact due to voter apathy. Indeed, the same phenomena which can be observed in the political arena also inflicts the defi space, with many DAOs suffering low voter turnout when it comes to major development decisions.

With this in mind, projects are now coming up with ways to increase voter turnout and maximize the democratic potential of DAOs by incentivizing voter participation.

A prime example of this is the concept of Voter Extractable Value (VEV) put forth by Bribe, a new defi protocol that incentivizes DAO token holders to leverage their votes by making the process more profitable for the average user.

Bribe Completes $4M Funding Round for Aave Pool

Incubated by Composble Labs and Advanced Blockchain AG, Bribe recently wrapped up a $4 million seed funding round which attracted participation from notable investors in the defi space. These include Spartan Group, Dragonfly, Hypersphere, Fundamental Labs, Rarestone Capital, Fenbushi Capital, and many others. The investors who joined the seed round will contribute tokens for use in Bribe’s maiden product, the AAVE Bribe pool.

Bribe’s novel concept of incentivizing voter participation will be applied to Aave’s DAO in an effort to increase turnout and promote overall user activity.

At its core, the process involves coordinating and auctioning large coalitions of DAO votes, allowing bidders to temporarily borrow voting power from the community at large and apply it to their chosen development goals.

Bribe’s VEV mechanism allows the average user to stake their governance tokens in a DAO-specific Bribe pool. The collective voting power of these Bribe pools can then be bidded on by other voters, with the resultant funds being distributed to the pool’s users. One added benefit for DAOs is that governance tokens needn’t be concentrated in the hands of a small number of users – they can be borrowed using USDC (USD Coin) as and when they’re needed.

“By moving this activity on-chain, we are ensuring that retail users can also participate, as well as providing data and case studies necessary to really understand what is going on ‘under-the-hood’ in DAO ecosystems,” said one of Bribe’s founders Condorcet.

Sanat Kapur of Spartan Group, which led the seed funding round, said Bribe’s method of incentivisation represented a powerful tool that could increase voter turnout in DAOs, while at the same time adding another layer of profitability for token holders.

Kapur said: “We think that an open, fair, and transparent marketplace to coordinate auctions for voting power is a powerful new defi primitive that will lead to increased governance participation while also creating a new source of yield for tokenholders.” 

The Bribe pool on Aave will be launched in full later in January, with a similar pool on Tokemac set to be released soon afterwards.

Image provided by LaunchTeam

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.