Sorry @Matthew_Graham , I’m with @BigSky7 on this one, we are making an offer to everyone in DeFi, some people had deeper pockets, but they are still providing the service (liquidity) that we are looking for.
Smaller stakers are penalised by having a higher proportion of their assets spent on gas, and we can try to reduce this (using the same staking contract since early Dec 2020, L2 liquidity mining), but I don’t see trying to prevent / reduce incentives for larger participants as being productive way to spend our resources.
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Looking past the INDEX token concentration and what implications that has on governance at Index Coop being increasingly centralised.
I would like to draw attention to the fact, units in the staking contract went up whilst INDEX rewards per day went down.
The quantity of LP tokens is increasing, the size of the liquidity pool on Uniswap is increasing and APR is falling. This data indicated LM rewards are still too high. This all happened when gas price was high, so capital should be reluctant to enter the staking contract. The data is showing the incentives are sufficient to bring in new capital despite high gas prices.
I believe the data is telling us we are over paying for liquidity. Furthermore, we are centralising our governance token distribution. Although the later is not a priority, there are indirect negative knock on affects.
The question I think we ask ourselves is how much should we be paying for liquidity ?
IMHO the data suggests less than we currently are.
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