Arbitrum Vote Buying Scandal: How 5 ETH Shook DAO Governance Integrity
- Vote buying on Arbitrum has become a major concern because 5 ETH purchases resulted in 19.3M ARB voting tokens.
- The practice of vote-buying on Arbitrum creates manipulation anxieties because political candidates use financial incentives to purchase votes.
- LobbyFi operates its low-cost platform to initiate governance attacks and weakens the protection of decentralized systems against manipulation attempts.
Arbitrum, one of the most prominent decentralized autonomous organizations (DAOs), has been through one of its major scandals vote buying. On the 8th of April 2025, it was reported that one person spent 5 ETH, roughly equivalent to $10,000, to purchase approximately 19.3 million voting tokens of Arbitrum (ARB). This raised concerns about the security of DAO governance systems.
Vote Buying on Arbitrum
The person involved in this vote purchase uses the app username hitmonlee.eth, who leveraged LobbyFi to buy the tokens. This platform enables token holders to give governance control to the highest bidder for use. In this case, those votes were cast to endorse CupOJoseph for the Over and Transparency Committee post in Arbitrum. This raised some concern as the committee is supposed to oversee the transparency of the network.
An increasing concern is that this kind of vote buying has the potential to become prominent in the DAOs systems. Pink Brains Ignas noted that the Oversight and Transparency Committee position comes with about $90,000 monthly annually. This implies that people can be in a position to purchase their votes just to be rewarded with some monetary offer. Some of the factors that this study examines include the various vulnerability levels within the DAO systems that employ a one-token-one-vote governance model.
Compound DAO Vote Manipulation
This case of vote-buying on Arbitrum is not the first of its kind. The same situation happened in 2024 when Compound DAO encountered the same issues. They voted to approve by $24 million to spend on an outside protocol, barely. This step was criticized by the community and attributed to meddling by one of the largest COMP holders. The Arbitrum experience shows no definitive security within the DAO paradigm.
Other similar platforms are now making it easier and cheaper to perform governance attacks, such as Lobbyfi. Specifically, the power to make crucial decisions can now be controlled without spending considerable money. This is a serious problem for DAO communities because such systems are highly susceptible to hacking. Vote buying is a problem affecting decentralized governances fundamentals due to its low cost.
Thus, with the growth of the number of DAOs, the problem of increasing demand for higher levels of security is urgent. Token holders and governance bodies must check vote buying and other related manipulations. However, there is a potential for weakening the integrity of decentralized systems if some precautions are not taken. This particular event signals the future of DAOs and their governance models.
Read more: https://www.tronweekly.com/arbitrum-vote-buying-scandal-how-5-eth-shook/
Text source: TronWeekly
