AMM-Level Protocol Bribes Funded from Trade Fees
Aquarius proposes protocol-native bribes powered by trading fees, directing portions to voter incentives weekly. Ties bribe availability to pool usage, aligning governance with productive markets. At current volumes, would generate ~$750/day in bribes.
Aquarius governance voting is currently driven heavily by third-party bribes, often misaligned with actual market utility. The proposal introduces a protocol-native bribe mechanism where AMM pools autonomously direct a portion of trade fees (e.g., 50%) into weekly voter incentives. High-volume markets would naturally accumulate larger bribes, incentivizing voters to support productive pools. The mechanism mirrors Aerodrome Finance's successful model. At current volumes ($500K daily) with 0.3% fees, the protocol would generate ~$750/day in bribes, comparable to top external offerings. Implementation requires contract upgrades to accumulate and distribute bribes weekly. No net cost to users: swap rates remain unchanged, though LPs see reduced direct fees offset by increased AQUA emissions from higher voting on voted pools.
