I’m going to try and break this down:
Deep liquidity is important to any token, so Anchor incentivizes users to provide liquidity on Terra’s current main DEX (Terraswap) by rewarding liquidity providers (LPs) with ANC tokens on top of trading fees.
This makes it more attractive for LPs (higher APR), but also puts a lot of sell pressure on the ANC token because it increases the number of coins in circulation, and because LPs have to sell their tokens to compound/cash out of their positions.
There are two topics being discussed here:
The main topic, for which the Astroport team created the thread, is “whether Anchor stakeholders are interested in switching the destination of ANC LP incentives from a liquidity pool on TerraSwap to one on Astroport”.
Whether the switch is enacted or not, Anchor’s LP incentives will remain the same. As a LP, you might simply have to move your LP tokens from Terraswap to Astroport to get the same ANC rewards, plus any Astroport’s ASTRO rewards.
Although it boils down to your definition of a “dump token”, IMO, Astro is unlikely to be one because of its gradual vesting model and tokenomics: similar to how CRV works, ASTRO can be staked to earn a portion of trading fees, or locked, to get even more. This model has allowed the CRV token to retain value despite extreme hyperinflation. For ASTRO, at the end of the day, it all depends on how central Astroport becomes as a DEX. The more liquidity and trading volume, the more protocol fees, and the higher the income for staker/lockers, incentivizing them to hold and reducing the circulating supply.
You mention “moving the selling pressure from ANC to ASTRO”. This brings me to the second topic, which was brought on by community members, who argue that the LP incentives (bonus ANC for LPs) are keeping the price of ANC down by increasing the supply relative to the demand.
They propose to reduce or cut the incentives to curb the inflow of new supply. Assuming the demand for ANC remains stable, such a measure should reduce selling pressure and drive the price of ANC up.
If stakeholders decide that Anchor should migrate to Astroport, providing liquidity to the ANC-UST pair would still be incentivized, but with ASTRO emissions rather than/on top of ANC ones. In effect, this “moves selling pressure from ANC to ASTRO”, because LPs would have to sell ASTRO to cash out.
This topic should be discussed in a separate post but here are a few things to consider as a LP.
On the one hand, if stakeholders decide to reduce LP rewards, the APR of your LP position would go down.
On the other hand, the price of ANC should gradually rise, meaning the value of your position would increase over time, and the income it generates could catch back up or even increase (not in terms of APR, but of $ value). If the increase is too fast, you might face impermanent loss. The APR from trading fees might also increase as some LPs exit their position and the utilization/liquidity ratio increases.
Hope that helps