GlossaryIntermediate
Vampire Attack
A strategy where a new protocol offers strong incentives specifically to drain liquidity and users away from an established competitor.
A vampire attack is a competitive strategy where a new DeFi protocol offers strong token incentives specifically designed to attract liquidity providers and users away from an established, often structurally similar, competitor protocol.
The term became widely used following a well-documented early example in which a new decentralized exchange specifically targeted an existing one's liquidity providers with aggressive token rewards for migrating their liquidity over.
Examples
- A vampire attack commonly offers a new governance token as a reward specifically for migrating liquidity from a competing, more established protocol.
- A vampire attack's success generally depends on the incentive being attractive enough to outweigh the switching cost and any loyalty liquidity providers have to the original protocol.