Super insightful perspective, thank you.
You are correct from the perspective of an investor looking to maximize investment returns from an LP position, for which virtually any form of uncorrelated AMM LPing would require enormous manouverability to follow the tick to avoid a dollar-loss from rebalancing.
The proposal is written from the perspective of improving market liquidity while also removing LDO from circulation. Although the DAO owns the position, provided it never withdraws from it, the time horizon for an IL calculation is theoretically infinite. If the price of LDO decreases, the share of LDO in the pool expands which is the correct cyclicality from a buyback efficiency perspective. Similarly if the price of LDO increases some LDO is technically ‘issued’ but at a more favorable price.
To answer your question, that is what the proposal is anchored around - not just simply removing LDO from circulation but improving its utility over time as well. In this framing, you are correct that the IL can be framed as a sort of ‘loss’ or cost though with a theoretically unbounded time horizon, this loss is never materialized and is out of the scope of the DAO balance sheet. This is a worthwhile tradeoff to achieve the strategic aim and avoid a situation of just expending capital to simply buy back a token.
Hope to see more contributions from you, thank you for taking the time to reply.