veTokenomics Governance Capture Simulator
Compare governance capture costs and economic risks between Curve-style vs Balancer-style protocols
📊 Market Assumptions
How veToken Systems Work
🟢 Curve (veCRV)
Simple & Direct:
- Lock pure CRV tokens directly
- Get veCRV proportional to amount × time
- Lock duration: 1-4 years
- Use veCRV for governance voting
- Can exit immediately after unlock
Risk: Only token price volatility
🟠 Balancer (veBAL)
Complex & Multi-Asset:
- Provide liquidity to 80% BAL + 20% ETH pool
- Receive BPT (LP tokens) representing your share
- Lock BPT to get veBAL
- Lock duration: 1-52 weeks
- Must unwind LP position to exit
Risks: Token price + ETH price + impermanent loss
🔑 Why This Matters for Governance Security
Curve attackers need only governance tokens and can exit quickly after voting.Balancer attackers must commit capital to both governance tokens AND ETH, bear impermanent loss risk, and maintain the LP position throughout the lock period. This makes Balancer governance ~1.8x more expensive and risky to attack.
Simulation Controls
Percentage of total token supply locked in veToken contracts. Higher participation makes governance capture more expensive.
Average time tokens remain locked. Affects timeline charts - Curve attackers can exit quickly, Balancer attackers must maintain LP positions.
Token price during bear market conditions. Lower prices reduce attack costs significantly.
Token price during bull market conditions. Higher prices increase absolute attack costs.
Premium required to compensate for impermanent loss risk in LP positions. Higher values make Balancer governance more expensive.
Premium for maintaining capital commitment throughout lock period. Balancer attackers can't exit immediately like Curve attackers.
Market Impact Comparison
- Curve-style
- Balancer-style
Bear Market
Curve: $244.8M | Balancer: $439.9M
Token: $0.80 | ETH: $1,200 | Participation: 25%
Bull Market
Curve: $1377.0M | Balancer: $2474.3M
Token: $4.50 | ETH: $5,000 | Participation: 60%
Key Insight
Balancer-style protocols require 1.8x effective capital: 1.25x base cost (BPT includes ETH) + 15% IL risk + 25% commitment premium
Methodology
Curve: Lock pure governance tokens directly for voting power.
Balancer: Lock BPT (80% BAL + 20% ETH) for voting power. Base cost is 1.25x higher since BPT includes ETH. Risk premiums: +15% IL risk, +25% commitment duration = 1.44x total risk multiplier.
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