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Author: arndxt Compiled by: Block unicorn

I believe we will witness the yield war again. If you have been in the decentralized finance (DeFi) space long enough, you know that total value locked (TVL) is just a vanity metric until it is no longer.

In a highly competitive world of modular Automated Market Makers (AMMs), perpetual contracts, and lending protocols, what truly matters is who can control the liquidity routing. It is not about who owns the protocol, nor is it about who distributes the most rewards.

And who can persuade liquidity providers (LP) to deposit and ensure that TVL is sticky.

This is precisely the starting point of the bribery economy.

The previously informal ticket buying behavior (such as Curve wars, Convex, etc.) has now professionalized into a mature liquidity coordination market, equipped with order books, dashboards, incentive routing layers, and in some cases, even gamified participation mechanisms.

This is becoming one of the most strategically important layers in the entire DeFi stack.

Changes: From Issuance to Metaverse Incentives

In 2021-2022, the protocol guided liquidity through traditional means:

Deploy the liquidity pool

Issue tokens

Hope that the profit-driven LP will still stay after the decline in yield.

But this model is fundamentally flawed; it is passive. Every new protocol competes with an invisible cost: the opportunity cost of existing capital flows.

I. The Origins of the Profit War: The Rise of Curve and the Voting Market

The concept of yield wars began to take shape during the Curve Wars in 2021.

The unique design of Curve Finance

Curve introduced the voting escrow (ve) token economics, allowing users to lock $CRV (Curve's native token) for up to 4 years in exchange for veCRV, thereby obtaining:

Enhanced rewards for Curve liquidity pools

Voting to determine the weight (which liquidity pools can issue) governance rights.

This creates a meta-game around the issuance:

The agreement hopes to gain liquidity on Curve.

The only way to gain liquidity is to attract votes to their pools.

Therefore, they started bribing veCRV holders to vote in their favor.

Then there is Convex Finance

Convex abstracts the locking of veCRV and acquires aggregated voting power from users.

It has become the "Kingmaker of Curve", having a significant influence on the distribution of $CRV.

The project started bribing Convex/veCRV holders through platforms like Votium.

Lesson 1: Whoever controls the weight controls the liquidity.

II. Incentives and Bribery Market

The first bribery economy initially only manually influenced the issuance volume, and later developed into a mature market, where:

Votium has become an off-chain bribery platform for the issuance of $CRV.

Redacted Cartel, Warden, and Hidden Hand have emerged, extending this to other protocols like Balancer and Frax.

Agreements no longer solely pay issuance fees; they also strategically allocate incentives to optimize capital efficiency.

Expansion beyond Curve

Balancer adopts a voting escrow mechanism through $veBAL.

Frax, TokemakXYZ, and others have integrated similar systems.

Incentive routing platforms like Aura Finance and Llama Airforce have further increased complexity, turning issuance into a capital coordination game.

Lesson 2: Returns are no longer about Annual Percentage Yield (APY), but rather about programmable meta-incentives.

III. The Combat Methods of the Profit War

The following is the competitive approach of the agreement in this meta-game:

Liquidity aggregation: Aggregating influence through wrappers similar to Convex (such as Balancer's AuraFinance).

Bribery activities: Allocate budget for ongoing vote bribery to attract necessary issuance.

Game Theory and Token Economics: Locking Tokens to Create Long-Term Consistency (e.g., ve model).

Community Incentives: Gamified voting through NFTs, lotteries, or additional airdrops.

Nowadays, protocols like turtleclubhouse and roycoprotocol are guiding this liquidity: they do not issue blindly, but rather auction incentive mechanisms to liquidity providers based on demand signals (LP).

Essentially: "You bring the liquidity, and we will direct the incentives to where it matters most."

This unlocks the second-level effect: the protocol no longer needs to forcibly acquire liquidity, but coordinates it instead.

Turtle Club

One of the lesser-known yet extremely effective bribery markets. Their funding pool is often embedded in partnerships, with a total locked value of (TVL) exceeding $580 million, utilizing dual token issuance, weighted bribery, and surprisingly sticky liquidity providers (LP) as the foundation.

Their model emphasizes fair value redistribution, meaning that issuance is guided by voting and real-time capital velocity indicators.

This is a smarter flywheel: LPs are rewarded based on the effectiveness of their capital rather than just its scale. This time, efficiency is finally incentivized.

Royco

In one month, its TVL surged to $2.6 billion, a month-on-month increase of 267,000%.

Although some of them are "points-driven" capital, it is important to focus on the underlying infrastructure behind them:

Royco is an order book with a preference for liquidity.

Protocols cannot simply provide rewards and hope. They issue requests, and then LPs decide to invest funds, ultimately coordinating to become a market.

This narrative is not just the meaning of profit games:

These markets are becoming the meta-governance layer of DeFi.

HiddenHandFi has cumulatively sent over $35 million in bribes across major protocols such as VelodromeFi and Balancer.

Royco and Turtle Club are now shaping the validity of the issuance.

The mechanism of liquidity coordination market

1. Bribery as a Market Signal

Projects like Turtle Club allow LPs to see where incentives are flowing, make decisions based on real-time metrics, and receive rewards based on capital efficiency rather than just capital size.

2. Request for Liquidity (RfL) as Order Book

Projects like Royco allow protocols to list liquidity needs similar to orders in the market, with LPs filling them based on expected returns.

This has become a two-way coordination game rather than a one-way bribery.

Ultimately, if you determine the direction of liquidity, you influence who can survive in the next market cycle.