Incentive Matching Fee Based and 1:1 Caps

Voting YES for this proposal indicates that matching external incentives will no more than double the standard OSMO incentives for a pool and not be matched more than 1:1 in dollar value.\n\n Voting NO for this proposal indicates that external incentives will continue to be over-matched according to the external incentive dollar value provided according the bias established in proposal 128 and only capped by the 30% global cap established in proposal 127. \n\n This proposal asks two questions of Osmosis governance and was combined as they are linked.\n The external incentive program established in Proposal 47 has resulted in huge amounts of external tokens being distributed to Osmosis Liquidity Providers as rewards. However, the recent external incentives for STARS, HUAHUA and CMDX, as well as the proposed external ROWAN incentives in #132, have been substantially higher than previous ones. Matching these has resulted in a large amount of the daily Osmosis incentive distribution being used for matching purposes and has had proportionately reduced the APR across other pools without matching incentives.\n A bias to external incentives has been confirmed in Proposal 128. This is not a simple weighting to provide non-Osmosis incentives 50% of the rewards that Osmosis pools do. Instead the weight of non-OSMO pools is decreased by 50% as well as the weight of OSMO pools being raised by 50%.\n As a result of this, on the next semi-automatic incentives proposal, each of external incentives on non-OSMO pools will not only be matched by bash.50 in OSMO rewards, but would also result in OSMO pools being matched by .50. (In both instances up to the 30% overall cap coming into effect). \n\n This proposal requests that the maximum match for in external incentives is in OSMO. \n\n These external incentives have also generated a lot of hype around high APRs, partially funded by Osmosis matching these high external incentives on new pools. This may have caused price increases of these tokens as liquidity providers seek to buy in to pools with higher APRs. In turn causing the price to further increase and therefore requiring even more OSMO to match the, now higher, dollar value of external incentives.\n In order to ensure that the OSMO spent on matching these external incentives is useful for the ecosystem, this proposal requests that a cap on the dollar value of OSMO used for matching be added based on the fees generated by the pool. Fees generated give an indicator of how actively a pool is used and the value that the additional liquidity attracted by this external matching will bring to Osmosis. This cap would be based on the Subsidy Bias model that is in use for normal incentives, promoting the addition of external incentives on OSMO pools and reducing Osmosis' spend on other pools. I.E. of fees generated in OSMO pools would allow, currently, 3x the dollar amount of OSMO to be available to meet external matching up to the other caps compared to of fees in a non-OSMO pool.\n\n In short this limits the bonus OSMO APR provided by the incentive matching program to the non-matched APR. \n\n Whichever of these caps is hit first would be the maximum dollar amount of OSMO that Osmosis uses to match incentives. \n\n Model based on figures from the Semi-Automatic Incentives Proposal #131: https://docs.google.com/spreadsheets/d/1YUST7SUkdr3__HgMqfFxItkmTaXhd1Nmsk-Ji0EASNs \n\n Commonwealth Thread on fee based cap: https://gov.osmosis.zone/discussion/3578-proposal-external-incentive-matching-caps-on-asset-pairs \n\n Commonwealth Thread on 1:1 matching: https://gov.osmosis.zone/proposal/discussion/3577-proposal-osmo-bias-on-external-incentives-should-not-overmatch-dollar-value/