This is a proposal to move all RAI Mint + LP Incentives to the Uniswap V2 RAI/ETH pair in the next distribution period.
The current distribution includes 100.2 FLX/day to RAI/DAI Uniswap V2 LPs which make little sense at this point for the reasons below:
RAI/DAI Uniswap V3 is insanely more capital efficient than V2. By subsidizing RAI/DAI Uniswap V2 with FLX we are unnecessarily creating sell pressure on the governance token FLX. LPing on RAI/DAI Uniswap V3 is occurring naturally, and gathers more fees (as @elghosto mentions) when RAI/ETH Uniswap V2 has more liquidity because arbitrage bots trade larger size against it.
I bought into the RAI/FLX vision because of ETH as the only collateral and don’t want the system to rely on DAI (and thus centralized coins). If DAI is one of the main avenues of liquidity then there is an implicit reliance on the DAI system to not implode.
RAI/ETH Uniswap V2 isn’t great for slippage at it currently stands. Whales won’t use RAI if they cause 1% of slippage when they want to swap it back and forth for ETH. To ensure sufficient liquidity, we need to focus all incentives on RAI/ETH, not RAI/DAI, especially when the incentives are denominated in the governance token FLX (which I hold) and is going down in dollar terms.