Lobby Finance Is Now The Largest Arbitrum DAO Delegate: The Silent Rise Of Crypto Lobbying

Recently, Lobby Finance has shifted the governance of Arbitrum, one of Ethereum’s leading L-2 solutions. It has secured control over 20.54 million ARB tokens, which translates to significant voting power with 20.65 million votes. Indeed, this influence extends to other DAOs as well, where they hold notable voting power in networks like Blast, zkSync, Optimism, Manta, and Scroll.

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Lobby Finance Became The Leading Delegate in Arbitrum DAO, The Power to Shape web3’s Politics.

DAOs make decisions through a consensus of token holders who vote on proposals, unlike traditional lobbying where a centralized body makes the decisions. This democratic process can decide the direction and focus of lobbying efforts. In DAOs, voting power is often tied to token ownership. Clearly, those who hold more tokens have greater influence over decisions. DAO lobbying is typically grassroots in nature, reflecting community’s interests rather than a single entity’s agenda.

Lobby Finance, also known as LobbyFi, is a web3 platform that focuses on enabling decentralized autonomous organizations (DAOs) to engage in governance through a fresh approach. This enables DAOs holders to delegate their voting rights. Undoubtedly, a system that’s influencing outcomes. With a platform where votes can be bought, it introduces a market-like way to governance.

LobbyFi just became the largest delegate in the @arbitrum DAO.

This marks the beginning of fulfilling our long-term vision.

We invite each and every one of you to build it with us. pic.twitter.com/H9FDcBX1a7

— LobbyFi (@lobbyfinance) January 24, 2025

Lobby Finance users can participate in instant buys or auctions, casting votes based on the outcomes of these financial mechanisms. This model simplifies governance participation for less engaged users and also sways decisions towards those willing to invest more in the governance process. In addition, it bridges the gap between token holders who are less engaged in governance and the need for active, informed decision-making within DAOs. It operates on the principle of bringing “lobbyism to DAO governance,” where it aggregates voting power to influence governance outcomes.

Moreoever, Lobby Finance also holds considerable voting power in other Layer 2 DAOs like Blast, zkSync, Optimism, Manta, and Scroll, an influence on multiple ecosystems. The are building a crypto DAO that could become as impactful as traditional political lobbying.

One of more interesting developments in DAO governance world recently.

LobbyFi control a voting block that make them the biggest Arbitrum delegate, they sell that block on the secondary market.

Not a governance attack, this is the natural end game for token weighted voting. https://t.co/xs9YrwOytW

— drnick.eth (@DrNickA) January 26, 2025

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The Silent Rise of DAO Lobbyists

As DAOs continue to grow in size and complexity, lobbyists like Lobby Finance could become more dominant. They might serve as a bridge between the technical complexities of web3 and its user bases that don’t have the time or expertise to engage directly. The rise of Lobby Finance means that governance could become a battleground for financial power leaving the purpose of decentralization.

The presence of Lobby Finance in these DAOs raises questions about decentralization versus centralization of power. While it democratizes participation by involving more token holders indirectly, it also potentially centralizes decision-making power in the hands of those with financial resources to buy votes. Although, this also draw some questions amongst the  crypto community. In contrast, ETH founder Vitalik Buterin might support this mechanism, pointing that governance bribing will happen one way or another.

Re-upping my article from 2021 addressing this, and some possible solutions:https://t.co/Cvl7CFUIDE@_futarchy is one example of category 3 (skin in the game for governance). There's still a bribeable governance layer for the utility function, but at least it's more indirect… https://t.co/GU6M2SJMuM pic.twitter.com/n73iVouuyF

— vitalik.eth (@VitalikButerin) January 27, 2025

Obviously, complexity and volume of decisions within DAOs have grown. This naturally leads to a demand for more efficient governance mechanisms, where delegating voting power to knowledgeable or dedicated individuals or groups becomes appealing. The challenge of managing governance with a large number of token holders becomes more noticeable. Definitely, delegating votes can help in scaling decision making processes, making it more manageable. Lobby Finance motivates users to delegate votes by offering financial rewards.

Lobby Finance rise to the top of Arbitrum’s DAO governance hierarchy was somewhat unexpected and certainly silent.

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