# What Is a "Vampire Attack" in DeFi, and How Is It Related to Governance and Token Supply? ▴ Learn

**Published:** 2025-11-17
**Categories:** Learn

---

## What Is a “Vampire Attack” in DeFi, and How Is It Related to Governance and Token Supply?

A vampire attack is a strategy where a new DeFi protocol attempts to drain liquidity from an existing one by offering higher incentives, often through a new token. It relates to governance as the new protocol may use the acquired liquidity and new token distribution to establish its own governance power.

It impacts token supply by causing a rapid shift in liquidity and potentially inflating the new protocol's token supply to attract users.

What Is “Vampire Attack” in the Context of Decentralized Finance (DeFi) Governance?

What Is an ‘Orphan Block’ and How Is It Handled by the Network?

What Is a “Vampire Attack” in the Context of DEX Liquidity and Spread?

How Is the Concept of “Slippage” Related to the AMM’s Mathematical Formula?

## Discover More

- 
### [What Is the Significance of the Supply/demand Balance for a Cryptocurrency’s Price?](https://crypto.greeks.live/learn/what-is-the-significance-of-the-supply-demand-balance-for-a-cryptocurrencys-price/)
![The composition presents juxtaposed, sharp, and curved planes of deep navy and muted beige polymers against an absolute black void, suggesting the precise mechanics of a complex financial instrument. This abstract juxtaposition embodies the theoretical structure of the implied volatility skew evident in high-frequency options trading environments. The leading, pointed edge reflects the extreme delta exposure inherent in managing perpetual swap contracts where liquidity cascades meet aggressive liquidation engines. The smooth, interlocking surfaces symbolize layered collateralization and the embedded mechanisms within decentralized autonomous organizations managing synthetic asset issuance. This aesthetic highlights the convergence of engineered precision and inherent market turbulence, analogous to navigating strike price premiums across concentrated liquidity pools for efficient capital deployment in nascent DeFi protocols governing structured products.](https://crypto.greeks.live/wp-content/uploads/2025/10/Aerodynamic-Composite-Structuring-Evoking-Volatility-Surface-Topology-In-Decentralized-Finance.jpg)

It is the core economic driver; price rises when demand outpaces supply and falls when supply outpaces demand.

- 
### [What Is a Governance Token and Its Role in a DAO?](https://crypto.greeks.live/learn/what-is-a-governance-token-and-its-role-in-a-dao/)
![The highly polished, curvilinear casing transitions from taupe to deep onyx, suggesting a complex physical interface for managing decentralized financial primitives. A central, convex lens housing emits a focused, ethereal blue luminescence, conceptually representing the locked liquidity or staking reward beacon within a sophisticated algorithmic stablecoin protocol. This visual nexus evokes the perceived solidity of centralized exchange architecture juxtaposed against the fluid, opaque nature of on-chain settlement mechanisms or complex exotic options payoff profiles. The design aesthetic hints at enterprise-grade execution environments for high-frequency market making of perpetual futures contracts or the secure cold storage key custodian interface for substantial on-chain asset governance tokens, reflecting robust collateralization ratios.](https://crypto.greeks.live/wp-content/uploads/2025/10/Sleek-High-Gloss-Biomorphic-Instrument-Displaying-Internal-Quantum-Entanglement-Illumination-Indicative-of-DeFi-Primitives.jpg)

A cryptocurrency that grants holders voting rights to propose and decide on the operational changes of a DAO or DeFi protocol.

- 
### [How Does the Voting Power of a Governance Token Holder Relate to Their Token Balance?](https://crypto.greeks.live/learn/how-does-the-voting-power-of-a-governance-token-holder-relate-to-their-token-balance/)
![This macro photograph captures a complex, highly polished mechanical assembly suggesting an intricate actuation system, colored in deep cyan reflective metallic sheens against absolute black void background. The structure resembles a central hub with four extended, sharply angled vanes, evoking mechanisms for high-frequency execution or arbitration inherent in DeFi protocols. Conceptually, this represents the final physical manifestation of complex digital consensus or a critical over-the-counter block trade settlement resolved through smart contract arbitration layers. Key elements hint at the immutable finality achieved post-governance proposal ratification impacting underlying asset liquidity pools or synthetic asset collateralization ratios. It symbolizes the deterministic pathway from on-chain signaling to off-chain protocol enforcement, integrating concepts like atomic swaps execution and collateralized debt positions management within a permissionless framework.](https://crypto.greeks.live/wp-content/uploads/2025/10/High-Precision-Actuator-Mechanism-Visualizing-Decentralized-Autonomous-Organization-Governance-Vote-Execution.jpg)

Voting power is usually proportional to the token balance (one token, one vote), risking plutocratic control.

- 
### [In DAO Governance, What Is ‘Vampire Attack’ Risk and How Does Treasury Management Mitigate It?](https://crypto.greeks.live/learn/in-dao-governance-what-is-vampire-attack-risk-and-how-does-treasury-management-mitigate-it/)
![The close-up reveals layered metallic and dark composite components suggesting intricate internal machinery reminiscent of a complex storage drive or actuation system, focusing on precision engineering. This visual metaphor represents the immutable ledger architecture underpinning DeFi protocols where governance tokens facilitate critical decision-making analogous to smart contract execution variables. The alignment mechanism situated centrally suggests dynamic calibration necessary for accurate oracle price feeds, essential for calculating options premiums and managing collateralization ratios in leveraged yield farming strategies. Such electromechanical precision mirrors the required robustness for decentralized finance infrastructure, ensuring settlement finality and mitigating slippage across complex swap manifolds. Keywords include: Deterministic State Transition Immutable Ledger Consensus Mechanism Oracle Network Price Discovery Automated Market Maker Liquidation Thresholds Collateralized Debt Positions Impermanent Loss Hedging Volatility Skew Analysis.](https://crypto.greeks.live/wp-content/uploads/2025/10/Mechanistic-Assembly-Depicting-Latent-Space-Mapping-for-Decentralized-Autonomous-Organization-Governance-Oracles.jpg)

A competing protocol forks a DAO's code and steals liquidity with better incentives; mitigated by funding innovation and competitive rewards.

- 
### [How Does a Fixed versus Variable Staking Reward Rate Impact Supply Predictability?](https://crypto.greeks.live/learn/how-does-a-fixed-versus-variable-staking-reward-rate-impact-supply-predictability/)
![The composition illustrates distinct structural elements representing complex financial modeling over a stark black void, reminiscent of off-exchange dark pool activity. A translucent, dark blue planar reflection suggests obscured market data or shielded order flow execution. The central structure features matte, pale disks supporting a smooth, aquamarine hemispherical asset, symbolizing aggregated collateral or a stablecoin vault mechanism. This visual architecture mirrors the construction of exotic options payoffs or the multi-layered risk parameters within decentralized autonomous organizations managing perpetual futures contracts. The interplay of curved surfaces and sharp edges evokes the precise mathematical boundaries governing implied volatility skew in digital asset derivatives markets, far removed from simplistic spot trading paradigms and indicative of advanced structured product architecture like synthetic asset replication protocols.](https://crypto.greeks.live/wp-content/uploads/2025/10/Decentralized-Finance-Volatility-Surface-Topology-Featuring-Atomic-Swap-Derivative-Primitives.jpg)

Fixed rates offer predictable supply growth; variable rates introduce supply uncertainty.

- 
### [What Is a Margin Call and How Is It Related to Marking-to-Market?](https://crypto.greeks.live/learn/what-is-a-margin-call-and-how-is-it-related-to-marking-to-market/)
![The visualization presents a highly technical, metallic internal mechanism bathed in cool cyan luminescence against deep shadow, suggesting advanced engineering within high-frequency crypto operations. This structure, featuring nested cylindrical assemblies and articulate linkages, conceptually models the deterministic precision required for automated settlement of perpetual futures contracts. It reflects the internal workings of a digital vault mechanism underpinning high-leverage perpetual swaps. Keywords defining this complexity include basis risk quantification collateralization mechanisms liquidity provisioning algorithmic execution stochastic volatility indexing gamma exposure management slippage minimization order book depth analysis and decentralized finance infrastructure scaling solutions. The image evokes the stringent, unyielding logic of on-chain derivatives processing where every component must function flawlessly for trade closure.](https://crypto.greeks.live/wp-content/uploads/2025/10/Exposed-Cryogenic-Actuator-Mechanism-Illustrating-Complex-Perpetual-Futures-Settlement-Architecture.jpg)

A demand for additional funds when MTM losses cause the margin account to fall below the required maintenance level.

- 
### [How Does the Speed of Governance Affect a DeFi Protocol’s Ability to Respond to Exploits?](https://crypto.greeks.live/learn/how-does-the-speed-of-governance-affect-a-defi-protocols-ability-to-respond-to-exploits/)
![The image displays a macro view of interlocking metallic components, featuring teal and muted silver-grey planar surfaces intersecting around a central pivot point where a thin, polished rod extends outwards. This composition metaphorically represents the intricate synchronization required for decentralized finance settlement layers, specifically analogous to mechanisms governing Byzantine Fault Tolerance consensus. The central metallic rod symbolizes a verifiable execution stream or a high-frequency quote delivery in synthetic asset derivatives pricing models. Key elements evoke structured products and collateral management within DeFi primitives, such as fractional reserve mechanisms or the physical representation of a private key security module interfacing with a smart contract oracle for automated liquidation thresholds. Concepts include liquidity pooling triangulation cross-collateralization and atomic swap finality testing against slippage parameters.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Machining-of-Blockchain-Governance-Mechanism-Cross-Asset-Settlement-Execution-Rod.jpg)

Slow governance increases damage from exploits; fast, efficient governance is vital for implementing emergency patches.

- 
### [What Is a “Vanity Address” and How Is It Related to Nonce Iteration?](https://crypto.greeks.live/learn/what-is-a-vanity-address-and-how-is-it-related-to-nonce-iteration/)
![This macro composition features a cool toned, semi-translucent cyan dome encircled by a sharp metallic ring resting atop a textured, greyscale mechanical base with engraved data points. It abstractly embodies the structural complexity of sophisticated decentralized autonomous organization governance models intersecting with high-frequency options market microstructure. The planar element bisecting the sphere suggests the intrinsic leverage inherent in exotic derivatives pricing methodologies like Black-Scholes extensions applied to illiquid DeFi assets. This visual metaphor addresses persistent risk aggregation in perpetual swap protocols where implied volatility surfaces dictate synthetic asset valuation and potential margin cascades across layered collateralized debt positions. The underlying textured cylinder hints at the robust infrastructure supporting transparent on-chain settlement mechanisms and layered liquidity provision strategies across multiple trading venues.](https://crypto.greeks.live/wp-content/uploads/2025/10/Saturnine-Structure-Representing-Stochastic-Volatility-Surface-Convergence-in-Decentralized-Finance-Primitives.jpg)

A custom address containing a specific phrase, generated by repeatedly hashing key pairs until the desired pattern is found.

- 
### [How Does Token Holder Governance Affect the Security Token’s Cash Flow?](https://crypto.greeks.live/learn/how-does-token-holder-governance-affect-the-security-tokens-cash-flow/)
![This visualization suggests the internal mechanics of a sophisticated, possibly clandestine, decentralized finance mechanism or a high-frequency trading apparatus overseeing digital asset pools. Metallic semicircles feature recessed optical elements emitting a muted cyan glow, symbolizing latent liquidity pools or potential yield farming apertures. The central dark structural bar, bisected by bright linear highlights, evokes the forced convergence point of synthetic asset reconciliation or margin call trigger mechanisms. This setup represents the opaque execution layer concerning impermanent loss mitigation strategies within Automated Market Maker protocols. Keywords include: synthetic assets collateralization dark pool execution algorithmic arbitrage flash loan structures delta hedging invariant functions collateralized debt position issuance tokenomics. The composition underscores the complex interplay between on-chain transparency and off-chain execution necessity in modern digital derivatives markets.](https://crypto.greeks.live/wp-content/uploads/2025/10/Symmetrical-Obscured-Digital-Asset-Lens-Array-Reflecting-Illiquidity-Premium-Structures.jpg)

Governance allows holders to influence profit distribution and fee structure, increasing value but also introducing governance risk.

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