My general approach to liquidity mining incentivization is that it should be gentle. It shouldn’t motivate people to buy or sell coins they don’t own.
So we address people who already own the coins and incentivize them to keep these coins in an LP pool instead of their wallets.
I do not find the proposed mechanism as a gentle liquidity incentivization.
I view it more as a game.
If I understand correctly, in this game, the winner is the one who staked UNI first to a pool that becomes popular later.
And the losers are:
- the ones who staked last, and
- the LPs and stakers of other pools.
I can’t find why we want to introduce a game with winners and losers into the liquidity mining program.
The mechanism of rewarding the early LPs based on liquidity and volume is already set in the default Uniswap design.
I see no reason to duplicate and enhance it with UNI distributions - and create a highly speculative environment around the program.
Last but not least, there are ways to cheat in this game.
Liquidity is manipulable.
Volume is manipulable - and will become much more manipulable in Uniswap V3.