Bribes

The inclusion of "bribes" as external incentives within the Elektrik protocol introduces a dynamic layer to its voting escrowed model. By offering additional rewards to voters who support specific liquidity pools, bribes act as a catalyst for enhanced participation, competition, and strategic alignment among stakeholders. Below are key aspects through which bribes serve as a positive flywheel to Elektrik's voting escrowed model:

Incentive Alignment

Bribes serve as extra incentives that align the interests of well-funded liquidity pool participants with voters. By attracting voter support towards specific pools, these incentives foster a more interactive and engaged governance model. This not only boosts voter turnout but also enhances stakeholder commitment, thereby elevating the overall governance quality

Competitive Liquidity Provision

The introduction of bribes incites a competitive environment where liquidity providers strive to make their pools more attractive. This is likely to result in pools that are not only well-funded but also efficiently managed. The knock-on effect is improved trading conditions, including reduced slippage and better price discovery, which, in turn, can attract more traders to the specific pools and the platform in general.

Strategic Capital Allocation

By offering bribes, pools can effectively crowdsource attention and capital towards initiatives that are perceived to have higher value for the ecosystem. This creates a feedback loop where valuable pools attract more capital, leading to better rewards and, consequently, more voting power allocated to these high-impact initiatives.

Regulations

To ensure healthy competition and prevent manipulation, the protocol will initially regulate the process by whitelisting specific pools for bribes. The whitelisting criteria include factors such as trading volume, liquidity in the pool, the number of active traders, and the number of liquidity providers. Pools meeting these criteria are eligible for bribes, which are then distributed proportionately to the voters in that pool during each epoch. The dynamic minimum time in existence for a pool serves as an additional check, allowing pools sufficient time before being considered for the bribery whitelist.

While this feature enhances engagement, the Elektrik team will diligently monitor and regulate the process, ensuring the allocation of bribes to pools that generate real value for the protocol and its users.