Vampire Attack

A vampire attack is a competitive tactic in which a new protocol offers token rewards to users of an established rival, then uses those incentives to pull the rival's liquidity or users onto its own platform. The best-known case is SushiSwap in 2020, which rewarded people for staking Uniswap liquidity provider tokens and then migrated the underlying deposits to its own contracts. The tactic works because deposits in open protocols are not sticky: liquidity follows yield and can be moved in a single transaction. It also tends to be temporary. When the subsidised rewards taper, mercenary capital leaves again unless the newcomer has built something users would have chosen on the merits.