Vote-Escrow Tokenomics

Vote-escrow tokenomics is a governance design in which voting power is granted for locking a token, and scales with how long it is locked for. A holder who commits tokens for the maximum term receives the most weight; one who locks briefly receives little; one who does not lock receives none. The stated purpose is to align influence with time horizon, so decisions are made by participants who cannot leave immediately after making them. It also creates a secondary economy. Because the votes typically direct where a protocol's incentives flow, projects that want those incentives have an interest in acquiring or renting voting weight, which is how vote-buying markets emerge around these systems. Two things follow for anyone considering a lock: the tokens are genuinely illiquid for the term chosen, and the value of the vote depends on a demand that can disappear.