I think this is not completely fair. NuLagoon did create the different pools, does the accounting etc.
As long as the compensation per provided liquidity volume is on a fair level (comparing ALP with MLP), LPs can decide where to put their funds depending on the work they want to invest.
If the part of the compensation an MLP claims for the management is too high, other MLPs or ALPs become more attractive in the (potential) LP’s eyes.
I’m not in favor of the motion, because I don’t consider it fair to leave NuLagoon with reduced compensation and making them pay the price for keeping a lot of sell side volume.
To provide an incentive to balance the buy and sell side I’d favour capping the compensation on one or either side.
What about paying only compensation up to, say 55%, of the total pool volume per side?
If the sell side is at 60% of the total pool volume, the buy side is obviously at 40%. The 40% get fully compensated and the 60% sell side only up to 55%.
This reduces the overall compensation of the pool and in the effect the management fee as it’s a share of the compensation.
This creates a direct incentive for the operator to balance (to increase the own compensation) and an indirect incentive, because balancing increases the reward for LP at the pool (possibly leading to more volume and more compensation).
I don’t know how much effort this is, but as there are two accounting days per week, they seem to be the perfect point of time to do this balancing, because at each accounting day it’s clear how much funds NuLagoon manages (after the deposits and withdrawals have been counted) and the type of the funds (buy or sell side funds).
This balancing might lead to unbalanced ALPs.
The balance there can only be restored trading with Nu (NBT for NSR or NSR for NBT) if it is beyond an acceptable level.
Going this way creates an incentive for LPs at ALPs to participate in seeded auctions.
If they end up having to much NBT, they might want to sell them for NSR in a seeded auction.
If they end up having too little NBT, they might want to buy them for NSR.
This could balance the buy and sell side as well as create some more volume at the exchanges.
Buy side BTC get sold for NSR to allow trading them to NBT in a seeded auction.
Sell side NBT get traded to NSR in a seeded auction and maybe exchanged to BTC afterwards.
It creates a kind of waterfall model in Nu’s liquidity (not in terms of tiers, but in terms of Nu and the pools).
MLPs balance their own buy and sell side.
Depending on the market situation this is causing unbalanced buy and sell sides at ALPs.
The LPs might then start trading with Nu to balance again.
This way Nu has another lever to influence the liquidity situation: the ratio between sell and buy side that MLPs are being compensated for will create more or less demand for NBT. This will lead to the actions described above.
If Nu wants to sell NBT to the market, because the demand is rising, all Nu has to do is to increase the reward for sell side compensation at MLPs.
The market will do the rest.
This is for sure no way to react on immediate surges or drops of demand for NBT, but for that Nu has the FSRT (first strategic reserve team) and soon buy and sell side custodian groups.
But it seems to be very well suited to steer the liquidity situation over time.