Reduce ANC liquidity incentives after move to Astroport

I wanted to start a thread on what we should set the ANC liquidity incentives to once we move to Astroport. As I write this, the proposal to migrate liquidity to Astro is ongoing (and I assume it will pass). Some discussion on this subject has already occurred on that thread, however as it will be a separate proposal, I thought a dedicated thread would make sense.

Here is my opinion on what we should do (and really this is just a starting point to kick off a formal conversation):

Start by providing the same LP rewards that we currently do. However, over the course of a month we taper it to 0.

  • By initially supporting LPs, we would ensure that all of the liquidity moves over. Having split liquidity between two exchange doesn’t help (I guess I’ll need to get used to using something other than the Terrastation UI for ANC swaps, but that’s a minor inconvenience)
  • By tapering off our rewards, we would avoid overpaying for liquidity
  • Astro’s rewards should be more than enough to incent ANC liquidity
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Assuming the proposal will pass to migrate liquidity to Astroport, and the dual incentives kick in thanks to the Astro Generator, I agree with your thesis that ANC holders will be/have been overpaying for liquidity for quite some time.

At this time total liquidity is north of 150M while total daily volume on Terraswap is around 10M. We also have to assume that more CEX listings will occur and liquidity will naturally deepen, therefore strengthening the argument to taper incentives (I say this as an LP from Day 1).

Not sure what the mechanics would look like but I think it’s a proper adjustment following the launch of Astroport.