Proposal to incentivize stETH/ETH liquidity on Uniswap

Proposals
1

I propose to set apart a % of LDO to incentivize stETH/ETH LP providers on Uniswap. Currently, LPs are providing liquidity for stETH, while incurring a significant risk of IL, and for little rewards as the LP fees are rather low.

One idea for a sustainable liquidity mining program would be to assign LDO rewards based on the lock duration of the LP tokens (i.e. if I lock my stETH/ETH LP tokens for 1 year, then rewards should be higher than locking for 1 week). A simple farm contract could be created for this (happy to help).

This would further incentivize liquidity on the stETH/ETH pair, until a point in time where Curve might accept it.

2

If I am not mistaken, isn’t there not a significant risk of IL?

3

Why don’t we request to be added to the sushi menu of onsen?

  1. Assign LDO+sushi to important stETH/ETH liquidity.
  2. request allocate sushi to stETH/LDO.

I don’t think it is necessary to allocate LDO to LDO liquidity.
L2 loopring should also be considered.

4

Uniswap is not safe to trade stETH on bc it’s a rebasable token. I like the LP locking idea a lot though.

5

Can you explain this? Will all stETH not receive rebase rewards?