WHY: YZY DAO want more liquidity. In DeFi, more total locked value means higher governance token valuations. Beyond the superficial stuff, more liquidity opens up doors that were not previously there -- we can execute increasingly complex yield farming strategies, we can achieve better economies of scale, we can pursue multiple opportunities at once, etc.
PROBLEM: Presently, liquidity additions also auto-claim all pending rewards. This is a common best practice for staking platforms as it reduces the number of transactions a user must make and saves them gas. However, YZY DAO's structures staking so that rewards mature based on a vesting schedule. Any early withdrawal of unvested rewards incurs a 20% fee and an immediate 20% loss of profits. This is fantastic when it punishes users who are pulling out before they've even vested. It punishes paper hands and rewards the true believers who are the beneficiaries of the confiscated rewards. However, it is terrible for users who doing the exact opposite and doubling down on their investment. If you deposit more ETH after your initial deposit, you will auto-claim your rewards and lose 20% of those rewards that had no vested yet. This discourages existing users from infusing even more of their funds into the ecosystem. And it leaves a bad taste in the mouth of our most ardent supporters who unwittingly gave up 20% of their profits in attempting to add more value to the system.
SOLUTION: I propose we do everything in our power to encourage people to continue to invest after their initial deposit. First, we could stop the auto-claim function altogether, meaning liquidity adds do not trigger a rewards claim. Second, we could create a function that only lets users claim the portion of their rewards that are already vested. Third, we could have an 'add liquidity' button in addition to the current 'add and claim' button. Fourth, we could put a warning. This is the least optimal because it does not do anything to actually encourage incremental reinvestments, but it at least leaves the user in charge of the decision and eliminates any possible feelings of ill-will.