[DIP-29] Incentivizing DFX/WETH Liquidity Pool on Arbitrum

Overview:

This proposal outlines a post-DIP-26 strategy to sustain incentives for DFX liquidity on Arbitrum. It also outlines the means of financing these incentives.

Motivation:

The primary objectives of this proposal are:

1. To sustain and enhance incentives for DFX liquidity on the Arbitrum network.
2. To broaden the exposure of DFX to a more extensive and diverse audience.

Specifications:

A total of 25,000 DFX tokens per month from the Treasury will be allocated to establish a liquidity reward initiative for the DFX liquidity pool.

Implementation:

The proposed implementation involves allocating 25,000 DFX tokens as incentives on HiddenHand's Aura marketplace. This approach offers a historical 20-30% premium in incentivization compared to providing only DFX tokens directly.

Pros:

This strategy offers the following advantages:

1. DFX trading on the Arbitrum network.
2. Equitable distribution of DFX to liquidity providers, thus acknowledging their value contribution.

Cons:

One notable drawback is the additional inflation of 25,000 DFX tokens per month.

By adopting this proposal, we can further facilitate DFX liquidity on Arbitrum while ensuring fair compensation for liquidity providers.