Launch incentives for Liquidity Provision

Intro: For its size and magnitude as a project, Beefy.finance could benefit from having more on-chain liquidity. Something that hasn't been incentivized by the platform itself until now. But some small incentivization could lead to greater benefits.

Issue: Currently Beefy is deployed on 15 different blockchains, with more potentially underway. Most of those blockchains have their initial BIFI liquidity provided by the treasury and some don't have any protocol provided liquidity at all. Overall Blockchains aside of BSC and Fantom have thin liquidity.

Out of these 15 chains, only BSC, Fantom, Polygon, Harmony, Moonbeam and HECO have other platforms incentivizing BIFI LP. And even all of the aforementioned aside of Fantom and BSC only have a single one each. In any case, liquidity on DEXs for Beefy is quite thin and the fact that the project's tokens exist on an expansive set of blockchains only makes things more complicated.

Lack of liquidity makes entries to new users harder, especially when it comes to large purchases. Also the token's price becomes more prone to market shocks and overall ease of use becomes harder especially for cross-chain applications. For example, it's easier for users on chains with low liquidity to fall victims to sandwich attacks.

Solution: Many protocols (see Curve.fi, AAVE for example) do also provide Liquidity Provision incentives. Beefy is a bit different in the regard that its token is not inflationary and all of the supply has already been released.

However, it would be possible to incentivize Liquidity Provision on each chain the project is deployed on by distributing part of the platform fees to an LP vault. As Beefy is hardcoded to collect fees from each platform's vaults and direct them to GOV/MAXI depositors, part of those could simply be redirected to an LP vault.

The percentage of GOV/MAXI earnings directed to LP incentivization, as well as whether or not LP providers should have GOV voting rights, could be decided on further votes if this proposal passes.

Implementation: The precise implementation of the new incentives would be left to the Beefy Core to decide based on the relevant technical and practical considerations at the time. However, one suggestion would be to focus on Beefy’s own BIFI LP vaults initially, to avoid having to make arrangements with ~15 LP protocols, and to maintain control over the distribution process.

As Beefy vaults exist on only 6 of its 15 current chains, the first phase of implementation would be simply to direct the agreed proportion of buybacks away from the Maxi/Earnings Pool vaults on those 6 chains, and send them to the most dominant LP vaults on each. The allocated BIFI could be zapped into the LP vaults, increasing the return for holders staking their LP on Beefy. This would allow us to test the impact of the change on liquidity, before investing further time/resources into this initiative.

Later on, Beefy could also make arrangements with partners on the other 9 chains (most of which have only 1 LP at present) to add BIFI incentives to their existing LPs via the partner protocol. Beefy could also consider creating its own LP vaults to sit on top of these partner LPs, to auto-compound these rewards for stakers.

Proposal: Beefy should redirect a proportion of its existing BIFI buybacks for BIFI Maxi and Earning Pool vaults towards BIFI liquidity pools, to incentivize more BIFI liquidity across its different chains.