In other words, you suggest bringing the UNI distribution APYs for participating pools closer to each other.
This would end up increasing the disparity in liquidity between the pools.
As it is a change to the status quo, I believe it needs more justification.
This criterion doesn’t make much sense to me.
There are diminishing returns on every new $1M of liquidity.
$1M worth of liquidity in a $50M pool is much more valuable than $1M worth of liquidity in a $900M pool.
However, if we find the diminishing returns criterion as the most crucial, we shouldn’t continue the liquidity mining program for the proposed pools. And start rewarding other pairs instead.
I believe there should also be a criterion in place that we use to measure overincentivization .
For example, spending all the treasury money on the WBTC-ETH pair doesn’t look right, even if it would bring larger liquidity to the platform.
Maybe we could explore the correlation of Volume and Liquidity among the pairs?
In my opinion, if we have an inverse correlation between Liquidity and Volume, it is a clear sign that the pair is heavily overincentivized.
And WBTC-ETH pair is the most overincentivized pair in the initial program.
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There was a question in the survey about restructuring the existing pools based on APYs, and here’s no clear preference there:
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We could state that we want to reward the Bitcoin community with the same APY we reward the other top-4 pools. Or that we want to bring more whale trading on WBTC on Uniswap.
But that would be political statements. I can’t detect a valid quantitative argument yet, though.
If we think about the slippage, the slippage below <0.01% is not even displayed in the UI. And 0.01% slippage already looks quite negligible given the fact that users pay 0.3% fee on top of it.