I play on maxed out difficulty without exploting smithing or other exploits, and currently own half the map, have 30 parties under my command, am stronger than any other kingdom, and still happily pay the Khuzait 4000 denars per day for peace. I'm super nice to everyone, never behead any lord. My kingdom and my fiefs were rarely a target for anyone, because everyone loves me so damn much they don't really want war with me or burn down my villages.
I never had a multi-front war until very recently. And when it happened, I immediately paid. Happily.
Thing is: When I take a town from a kingdom, that's at least ~2500 denars less daily income ls for them, and more for me. That means I can immediately pay 2500 denars per day as tribute and we're still breaking even financially. I'm not making them richer. Capture 2 towns, and 'only' paying 4k tribute per day is a big financial win for me!
Think of it as anti-snowballing: If a kingdom has lost a town to you, then they're already down 2.5k per day in income to you - paying you another 2.5k per day for peace, or accepting the loss for a long time would be utterly silly for them, it makes their position and recovery worse when they're already losing. You'd be snowballing super hard.
So when all other kingdoms declare war on me, I immediately pay all but one of them the maximum price for peace - they can financially pretend they have an extra town, but when we go to war next time, their extra income will stop immediately - they cannot sustain the war - and I'll have the ground, the castles, the defender's advantage, the hundreds of free militias they have to waste their armies on to actually gain the assets back. They also have a much harder time keeping their lords on their side due to a lack of fiefs to assign. So getting paid for peace while having lost a fief, even if it's a financial win for them, results in a terrible, terrible strategic situation for them once the next war starts.
The remaining one gets crushed with all the might of my empire - my villages don't get raided in a multi-front-war, the conquered towns pay the tribute twofold, and I'm richer and mightier than ever before, while paying the others a meager tribute of a few thousand denars per day.
Payoff analysis goes roughly like this:
I have 30 parties and 20 towns
Sturgia declared war, has 9 parties and 1 castle, and wants 1k per day for peace
Battania declared war, has 21 parties and 1 town and wants 2.5k per day for peace
Aserai declared war, has 40 parties and 20 towns and wants 4k per day for peace
Khuzait declared war, has 50 parties and 24 towns and wants 4k per day for peace
Western Empire declared war, has 15 parties and 6 towns and wants 2k per day for peace.
Continuing war with Sturgia can only earn me 1 castle, which is chump change. I have nothing to gain by fighting them, so I pay immediately.
Continuing war with Battania can only earn me 1 town. Again, I have nothing to gain by fighting them versus how much it would cost me to wage war, so I pay immediately.
Continuing war with Aserai or Kuzait each would be dicey since they're so powerful each. Much to gain, but it's not guaranteed that I'll actually realize those gains instead of just getting a hundred villages burnt down, so I pay immediately.
Continuing war with the Western Empire would be certain victory for me due to overwhelming numbers, and if I capture their 6 wealthy towns each earning 3k/day income, that war would gain me 18k income per day - which is more than the 11.5k per day the other parties want as price for looking away and letting me grab those 6 towns. No risk, high reward - a reward that is lessened by the price the other kingdoms demand for looking away while the Western Empire disappears, but in the end, I come out stronger and richer than before. I pay a share of my gains instead of trying to fight a 5-front war and losing way more in income by burning villages and losing fiefs because I can't defend everywhere.
And I won't be paying that share for long, because you know when the Western Empire is gone, those Aserai towns suddenly start looking very, very tasty....
All of this happened as described - everyone looked away, the Western Empire got gulped up into mine and ended up offering a lot of tribute for peace - which I of course denied, because what's 3k denars per day when you can get 3 towns with a combined income of 9k per day because you still have the upper hand? Meanwhile, the Aserai and the Khuzait got bored but... didn't want to give up all the tribute they got from me, so they went and fought and weakened each other, and now are ripe for the picking....and that's what the tribute bought me. 11.5k short-term tribute for 18k long-term income, one permanentely destroyed adversary, and two weakened remaining adversaries? A great trade!
In your case, Seonon is worth more than 2.3k tribute per day. Even if you pay that, you have decisively won the war, militarily and financially, and you can happily pay that, and Battania will not be likely to attack you in the time to come, and as soon as they do -> you have 2.3k more money in wartime, and they less. Getting 2.3k tribute from you is a terrible trade for them. Pay it and focus on taking the next town from someone else!
That the AI kingdoms always accept a tribute instead of declining and continueing to gang up and take fiefs is the really gamebreaking thing. Getting paid a tribute for peace when you could take land instead is a terrible, terrible trade, and the current prices are laughable for avoiding a multi-front war.
They declaring war together is a smart move. Them accepting a tribute for peace is a terrible, terrible move. The money is worth absolutely nothing in the grand scheme of things. I doesn't make them 'rich' at all, contrary, it puts them in a terrible strategic position for the forseeable future.
