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The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool. There are a number of ways to measure this, whether it be via the relative amounts of slippage or impermanent loss or strictly by the amount of UNI paid out in dollar terms for liquidity. The latter term is more intuitive and will be easier to consider for a heuristic Snapshot vote, while the former is more accurate but requires more data processing and cleaning. For this vote, I suggest we use the latter and do the following:
- Consider the entire UNI budget spent right now (54 UNI/block, since right now we have 13.5 UNI / block / pool) and divide it by 2 (27 UNI / block)
- Note that USDT, USDC tended to stay near 25% of the budget spent (which meets our criteria), so their relative fraction should be unchanged (6.75 UNI / block)
- For the latter two pools, note that the ratio of the Dai cost to WBTC cost averaged 1.76x with a standard deviation of 0.38. We can roughly say that if we compensate WBTC 2x what the Dai pool receives, then we should equilibrate to having Dai / WBTC have the same cost, so we give WBTC 9 UNI / block and DAI 4.5 UNI block
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