I’m chiming in here!
First of all, I’m so glad that this is finally being proposed!!! I’ve been a proponent for some sort of LP incentivisation since the start of Sanctum Research… You can check the discussion we had previously here:
Secondly, let me just say that an incentive program with regards to LP was done months before by @richard_ISC. You can find the results of said LP incentives utilising cloud here:
Though it was to incentivise ISC/INF liquidity, some key takeaways that happened in that experiment was:
- CLOUD price goes up post-Incentive plan occurring
- LPers tend to NOT be sticky post-incentive program
So voting “YES” as a general plan for incentives is a good thing - but the long-term effects is much to be desired as LPers might not be “sticky” in keeping their TVL in CLOUD/USDC.
In general, I’d like to also ask if we are going to build a POL for all the Option 1 and 2 LP and was would definitely vote yes if those fees generated goes back to generating more LP size within DEX.
To your points @Bengshark and @Azrangar, I agree, that those firms can just easily DCA into position - however, look at it in an instos perspective… the more liquidity a token has onchain, the more attractive it becomes in buying it.
With that in mind, I worry if we do put in more CLOUD as one-side supply - it’ll be much harder for price to appreciate - assuming no firm is buying CLOUD.
Additionally, I’d like to raise whether it might be a good idea to do a CLOUD/INF LP position instead of a CLOUD/INF position, as that will also aim to increase the participation rate of INF adoption. - something to consider as a “two birds with one stone” situation.
One other consideration is possibly adding Staked Cloud as a requirement to receive these cloud incentives? Like in order to get the 3M incentives, users must be providing CLOUD/USDC (or INF) + have a # sCLOUD available in their wallet to qualify for the incentives (if that’s possible).
Maybe that’ll somewhat loop out the issue that @TDegen has pointed out in point no.3 of his post:
Overall I think this is definitely a bullish proposal and we should continue to discuss - prolly get an additional option 3 of:
- Using the Option 2 Structure
- Add sCLOUD as incentive unlock requirement
- Consider CLOUD/INF instead of CLOUD/USDC