Hi @jdcook,
The original proposal for consolidating liquidity on V3 was for 700 INDEX.
The new proposal for consolidating liquidity on V3 is for 2,400 INDEX.
This proposal includes incentives to the value of $105,770. Paid in INDEX at $35 is 3,022 INDEX.
At the time of the original proposal to move MVI liquidity from V2 to V3, the data indicated LPs would migrate to V3 by themselves. When the staking contract ran dry the month earlier, we seen an increase in the V3 LP positions. This then faded and we started seeing MVI move to other ecosystems. Most likely in search of yield or being used productively.
With the Beta Finance opportunity the is a more immediate need to ensure there is adequate Uniswap V3 liquidity. This is needed for all lending protocols not using a Chainlink oracle price feed. A Rari Capital, Cream and Beta Finance all have the same oracle price feed needs.
If there are productive use cases for MVI holders beyond just being a liquidity provider then the incentive for being a liquidity provide must take this into consideration. What we have with this proposal is a second productive way of deploying MVI. Because of this I think we should see units of circulating supply increase. LPs receives INDEX + Swap Fee income, with BETA incentives available, then we should see greater trading volume that boosts the return for LPs.
There is also a subtle change in how we approach Liquidity Mining, we are trying something more burst like in nature. Higher APR, shorter duration. If this has good success, it may lead us to think about how we launch products. Rather than long draw out campaigns, we may find a lot of success in short, sharp campaigns. Then in time, we may have a net cost saving from refining our approach to liquidity mining. But we don’t know if the market will react this way, better to experiment with MVI than say a new product launch.
There is also around 15% of LP still in the Uniswap V2 DPI-ETH staking contract and I think after the original incentives to move liquidity from V2 to V3 were implemented 25% of LPs remained in the staking contract. MVI liquidity on V2 is a lot less than DPI’s was and we need a higher portion of LPs to migrate across to V3. I believe a higher incentive is needed for this. The main objective to to attain a reliable oracle price feed which them enables us to build out MVI integrations, expand the products surface area in the market with the goal of becoming as dominant as DPI. With a reliable oracle feed, we can seek listing integrations with Cream and Rari Capital. These objectives were not mentioned as part of the original objective.
FWIW - You are right this proposal did lead me thinking we a higher APR to be more effective at migrating LPs from V2 to V3. There are other considerations, as mentioned, but ultimately the need for a solid price feed is more urgent with this proposal.
IMHO - I suspect the net affect is for MVI holders to LP, achieve solid APRs and then remain sticky like we have seen on the V2 contracts. I also think the BETA rewards will help stimulate new circulating supply.