I think this is extremely important for the longevity of C3.
The PVP design, originally used by Curve and Frax exclusively for market making (positive sum), has introduced potential options that are not positive-sum, that are simply neutral (buy & hold) - and when voted on as opposed to other options - create worse equilibria. This is C3's opportunity cost problem.
We should explore a solution very seriously if we want to see C3 be positive-sum and sustainable.
Currently, the system is left vulnerable and inefficient.
At a protocol-level, we need incentives to reflect that:
A) bridging isn't happening (let's set aside those rewards separate from the gauges.)
B) One gauge to vote on market-making and holding tonnage creates equilibria that spends emissions for neutral actions, at the expense of positive-sum actions. This is an unnecessary cost.
Bifurcation of the gauge voting rewards to fix this opportunity cost problem should be explored.
Wonderful work by @cascade , CCG , and others i'm sure i'm overlooking here. Changing incentives to reflect that C3 benefits by rewarding market-making (voting on liquidity pairs), more than sequestration (hodling) - is intuitive.
These activities should not be in competition. We have seen the negative knock-on effects in the C3-Frax pool, the lifeblood of this protocol, as it dwindles daily. We should be more mindful of how we allocate these emissions over time.
Moving forward, I support freezing all protocol emissions for non-market making activities. (Snapshot vote 1)
Then, seeing as we would want protocol-level rewards for each of these activities: market-making, sequestration, & bridging, we'd need to decide how we split allocations for these. (Snapshot vote 2)
Then we can explore resuming other emissions.
This is a period in the market where we have the time to refine this decentralized bridge. Let's begin acting on this now.