Certain betting markets are far more fee-sensitive / fee-inelastic than others; this means that for those markets, maker and taker fees have less of an impact on betting volume than others. This represents a massive opportunity for SX to be more competitive on odds for the markets where bettors care about fees, while making up the difference with higher fees on the ones where they don't. A Dynamic Fee system would essentially have different fee tiers by market type, similar to the Uniswap v3 model.
A version of this is already live on SX; taker fees are 2% on normal bets and 5% on parlays. This reflects the fact that parlay bettors are typically less fee-sensitive (e.g. paying 5% doesn't mean much if you're betting on 8-leg parlay that pays out 40-1). Eliminating taker and maker fees for a short period of time will enable the SX team to clearly see which markets are impacted by a fee cut, and which ones aren't. This will enable the team to devise and implement a dynamic fee system during the summer that lowers fees for those that are and raises them for those aren't.
It also has the twin effect of potentially increasing betting volume during the interim period. Stakers will be paid from SX inflation (as introduced in the prior governance proposal), targeting a higher yield during this interim period to make up for the 4-month fee shortfall. We'll also compensate affected affiliates during the interim period as well.