[VeBetterDAO Proposal] Introduce Fair Use Rule: Prevent dApp-Level Redundant Incentive Loops

VeBetterDAO
1

As discussed in the recent thread on Vote2Earn2Earn mechanisms, I’d like to formally propose a rule to be added to the VeBetterDAO framework to ensure fair and sustainable participation for all dApps. The rules have been updated multiple times, based on research. The rules shall not only cover the issue described, but also prevents other extreme but possible scenarios.

:white_check_mark: Proposed Rule

To preserve the integrity of the weekly allocation system and prevent circular or redundant rewards, the following practices are prohibited for any dApp seeking or receiving allocations from VeBetterDAO:

1. Direct Double Dipping

A dApp must not use its own allocation to reward users for actions that are already directly incentivized by the protocol-level vote2earn mechanism (e.g. casting votes in proposals).

2. Recursive Rewarding (Incentive Layering)

A dApp must not reward users for interacting with another dApp where:

• The rewarded interaction is already subject to incentive allocation, and

• The primary behavior being incentivized (e.g., usage, voting, staking) is effectively the same action or result, now compensated multiple times.

This includes:

• Building a dApp that wraps or mirrors an existing incentivized dApp to harvest additional rewards

• Creating a reward structure that stacks incentives for the same on-chain action across multiple layers or interfaces

• Establishing cross-dApp partnerships that indirectly reward the same behavior via mutual or looped incentives

3. Fragmentation for Reward Multiplication

Splitting core functionality into multiple dApps solely to multiply weekly allocations or reward accruals is not allowed. If multiple dApps share infrastructure, execution paths, or are co-dependent, they may be evaluated jointly.

4. Social Amplification Loops

Rewarding users solely for broadcasting, proxying, or relaying incentivized actions (e.g., being a vote proxy, sharing vote results, inviting voters) is not allowed if those same base actions are already part of the vote2earn mechanism.

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Rationale and Ecosystem Impact

The proposed rules are not just theoretical — they respond to real behavioral patterns we are already seeing in the ecosystem.

One of the examples is the widespread adoption of auto-voting features across several dApps. While these tools improve accessibility and user convenience, they have also introduced unintended consequences:

  • Passive Voting Behavior: Once users enable auto-voting, they often stop actively evaluating dApps or updating their preferences. This entrenches existing vote flows, making it harder for new or evolving dApps to gain fair exposure and support.
  • Governance Distortion through Automatic Abstention – In recent governance votes, we’ve seen a high number of “Abstain” votes, many of which may come from passive auto-voting.
    :small_blue_diamond: It’s important to note that abstaining itself is a valid choice — users may genuinely decide not to take a position.
    :small_blue_diamond: However, automatically voting “Abstain” is different. When a user has to manually open and review a proposal, they are more likely to engage, reflect, or even reconsider their stance. Automation bypasses this, inflating quorum without meaningful governance participation.

These issues weaken both the competitive fairness of dApp Allocation and the DAO governance. By addressing redundant incentive loops, this proposal aims to preserve an environment where participation is both meaningful and merit-based.

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Healthy Competition is Welcome

We recognize that multiple dApps may naturally adopt similar X2Earn models — and that’s okay. Competition is part of the ecosystem, and users should have the freedom to choose. This rule does not prevent parallel dApps offering similar utilities or targeting similar use cases. It only applies when the same user action is being repeatedly rewarded across layers, creating circular incentive abuse.

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Clarification & Enforcement

• The community may audit reward structures to detect violations.

• Upon successful voting, the DAO authorizes the Admin Team to enforce the Fair Use Rules as part of the dApp lifecycle management process.

• dApps may seek clarification via a public discourse thread prior to implementation.

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6 Likes
2

Updated clarification based on DMs.

3

Good start to a proposal and totally agree that this needs to be addressed

How do you clearly define the distinction between the two, to me the second one feels like a loophole that can and will still be abused.

Especially with multiple apps currently not being clear about the voting by calling it “stake to earn”.

4

For the first point, the distinction should be:

  • The dApp is not designed solely to participate in voting and earn voter rewards.
  • The primary purpose of the dApp aligns with delivering a service, product, or utility beyond Vote2Earn.
  • The voting or delegation feature is integrated to improve user accessibility and participation, not as the core value proposition.

For the second point, I reached out to several dApps who integrated “staking” and provided, here’re a few examples:

Before: “Stake”, “Staking”
After: “Lock and Vote”, “Delegate and Auto-vote”

Before: “Staking Rewards”
After: “Voter Rewards”

Before: “APY”
After: “Voter Rewards %” “Voter Rewards Rate”

Description: By locking your tokens here, you’re participating in VeBetterDAO voting
via auto-delegation. You will earn voter rewards from VeBetterDAO. You will not be able to
vote manually while this is active.

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Hi everyone, I made significant update to the original post (proposal), mainly to position it as general rules that’s enforceable across the platform. This is the final draft.

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[Proposal] Introduce Fair Use Rule to Prevent dApp-Level Redundant Incentive Loops

Overview

This proposal introduces the Fair Use Rule as the first entry in the VeBetterDAO (VBD) dApp Rulebook—a living set of guidelines designed to protect the sustainability and fairness of the ecosystem. This rulebook may be reviewed and updated periodically in response to the DAO’s development and emerging challenges within the dApp landscape.

The Fair Use Rule aims to prevent dApps from creating redundant or circular incentive structures that exploit the Vote2Earn mechanism, ensuring that all participation remains genuine, merit-based, and aligned with the DAO’s intent.

Proposed Rule

To preserve fair distribution of weekly allocation and prevent gaming of the system, the following are prohibited for any dApp seeking or receiving B3TR incentives:

1. Direct Double Dipping

dApps must not use their own rewards to incentivize behaviors already directly compensated by protocol-level Vote2Earn incentives (e.g., proposal voting).

2. Recursive Rewarding (Incentive Layering)

dApps must not reward users for interacting with another incentivized dApp when:

  • The action is already subject to B3TR allocation.

  • The behavior results in redundant compensation for the same activity.

This includes:

  • Wrapping or mirroring existing dApps to farm additional incentives.

  • Stacking reward layers for a single on-chain action.

  • Reciprocal arrangements between dApps that loop rewards for shared behaviors.

3. Fragmentation for Reward Multiplication

Splitting functionalities into multiple dApps for the purpose of inflating total allocations is not allowed. Interdependent or co-deployed dApps may be evaluated as a unit.

4. Social Amplification Loops

Rewarding users for promoting, relaying, or proxying already-incentivized actions (e.g., vote sharing or vote proxying) is disallowed if the base action is already rewarded by the protocol.

Rationale and Ecosystem Impact

The rule targets patterns that risk undermining fair participation, such as widespread auto-voting tools. While beneficial for accessibility, these tools have led to:

  • Voter Apathy: Users relying on automation may disengage, locking in outdated preferences and harming discoverability for new dApps.

  • Governance Quorum Distortion: Automatic “Abstain” votes artificially inflate quorum metrics without reflective decision-making.

Preventing redundant loops ensures the DAO supports active, conscious participation and prevents wealth concentration through passive reward exploits.

Healthy Competition Encouraged

This rule does not prohibit competition among similar dApps. Multiple dApps may target the same category. The rule only applies where multiple incentives are layered on the same user action.

Clarification & Enforcement

  • Living Rulebook: This proposal forms the first rule in a growing VBD dApp Rulebook. Revisions will be considered as the ecosystem evolves.

  • DAO Authorization: The Admin Team is empowered by the DAO to enforce this rule as part of the dApp lifecycle process.

  • Transparency: The Admin Team shall communicate all enforcement actions publicly on the VeChain Discourse forum to ensure transparency and community oversight.

  • Pre-implementation Clarity: dApps may seek clarification via public discourse threads before launch to ensure compliance.

Conclusion

Introducing the Fair Use Rule is a foundational step to safeguard the integrity of VeBetterDAO’s incentive mechanisms. As the first rule of the VBD dApp Rulebook, it sets a precedent for proactive and transparent governance to support genuine innovation and fair competition across the ecosystem.

9

Whilst I appreciate and applaud the intention of this proposal I think that it will just further erode incentives and result in fewer people voting which will have the opposite effect on adoption than intended.

10

I like the idea, it’s great to see members from the team coming up with more ideas to help the community prosper!

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Hello everyone, this proposal is submitted and is looking for support.

I sincerely hope everyone can support this proposal — even 1 VOT3 makes a difference! Every bit of participation strengthens our community and moves us closer to our shared goals. Your support, no matter the amount, truly matters.

12

Received some inquiries, here’re a few examples to better understand the first couple rules:

Q: what if a dApp provides “auto-vote” (some call it “staking”) feature.
A: this is allowed as long as the dApp does not provide additional reward for voting. i.e., user only receive normal voting rewards from the “auto-vote” feature.

Q: Clarification for Social Amplification Loops
A: Promotion campaign to reward content sharing is OK. A dApp rewards user for social sharing other dApps is not allowed.

Q: Clarification for Splitting functionalities into multiple dApps
A: for example, Mugshot rewards user for using sustainable mugs for tea and coffee. A dApp “better coffee” rewards users for using Mugshot for a coffee is not allowed.

When the proposal is approved. The rules will be finalized with example and explanation and published as dApp entry guidelines.