RE: A Sustainable Approach to SPS DAO Liquidity Pools
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Well the thought is that we could cut the most egregiously underperforming pools and the DAO could step in and takeover if there's any demand/need. For example with the SPS:WETH pool we're printing 1.3 million SPS a month (almost $38,000 USD) for a pool doing $238,000 in volume. Whereas we have pools like DEC:SPS doing almost a million dollars in volume with only about $24,000 a month in incentives. Either way we're printing a hell of a lot of a tokens to rent liquidity that we don't really have any need at all to be renting. The DAO is sitting on over $10,000,000 in idle assets we could have in the pools generating revenue as opposed to devaluing our token constantly to rent liquidity we could provide ourselves. It's just not a smart business move in my opinion.
These incentives are definitely wrong and must be at least changed to reflect the demand for each pool. If we utilize the $10 million in idle assets, we may not even have to depend on anyone else to provide liquidity. I am definitely in favor of DAO taking LP positions. I want to see this idea get implemented as fast as possible.