BIP7: LM rewards to match APR fees for top 3 tokens (that need to be whitelisted first) up to some maximum
This would be separate LM rewards in addition to existing ones, to attract additional LD.
This would create volume competition to be in the top 3 tokens, which spurs additional earnings for LPs.
If a token like CoTrader earns #1 stop of 300% APR/week, another 300% in LM rewards would be given.
LMs would doubly benefit by BIP7, by earning the APR fees, without cost of extra BNT rewards.
Some small caps like CoTrader often see 300%+ APR on modest liquidity such as $10k.
As CEX liquidity options for small caps are often particularly limited, high fees such as 3% do not as often deter investors & traders of these tokens. We see this in practice.
Graded rewards for the top 1-10 tokens can create healthy competition for volume, which helps LPs.
Bancor especially benefits from LM since BNT sits in each pair.
( Additionally, Bancor may uniquely benefit from hosting yield farm launches, aka “farm drops”, because BNT benefits just as much as the token being farm dropped. More about that: https://twitter.com/cotrader_com/status/1329340381394178048?s=20
These farm launches often attract high, e.g. $3M LD and volume, even for new projects. )
All this volume and liquidity further benefits BNT & liquidity mining fund managers. More on LM fund management here: https://twitter.com/cotrader_com/status/1329355399313588224?s=20
Downside: potential wash trading:
Even if there’d be some wash trading, LM rewards + APR fees earned still attracts buying BNT to earn these sums. Wash traders would be paying the 3% fees, and if it’s a large pool, they’d be paying a lot. LMs/LPs would be the ones earning form the fees. If LMs/LPs think the token is too dangerous for for a drop in price, they would tend to avoid it.
Whitelisting is an additional protection against that.