I am no expert in DeFi, but LB to me seems like the last little incentive to do DeFi in Tezos L1. What’s left if it is gone as well?
LB is not an incentive for DeFi development.
It’s been 4.5 years, and trading volume is still too low to cover annual inflation of 2.6 million XTZ. I believe the XTZ/tzBTC pool should be converted into a classic pool where liquidity providers receive swap fees, and the subsidies should be eliminated. TF could add liquidity from its reserves to this pool. What’s the problem?
TF and the community must determine how to create conditions that will generate demand for the pool, rather than subsidize it, thereby maintainng artificial liguidity. Currently, until real demand for the pool is created, TF should be the initial liquidity provider, not those seeking inflated APRs from subsidies.
Public goods don’t need to pay for themselves. Inflation is low relative to baker rewards where I see very few complaints.
Also, there are other things that could be done that are far more interesting thinking additively. If there were any prospect of turning the pool into a shielded DEX, that would be far too appealing.
Haaa, these public goods could and should be provided by TF, not through subsidies that go to a small group of people providing liquidity to a pool where the liquidity is not fully utilized.
I will never tire of repeating that liquidity providers should earn money through swap fees, and subsidies should be disabled.
