First of all it’s been very interesting discussion to follow with plenty of interesting ideas that could be implemented short-term or long-term depending on the technicalities and community support.
As a community member I have bee quite satisfied of the liquidity mining program for the objective part of bringing more users as stakeholders for the Aave Protocol and distributing the governance power to a wider decentralized extent. Especially the idea of users receiving StkAAVE means that they become directly also backstoppers of the protocol and have automatically skin in the game. For future long-term reference I would recommend community members to consider whether there could be additional staking utility for StkAAVE - maybe allowing community members to take additional risk or “asset-specific” risk based on staking StkAAVE. Just some food for thoughts.
In terms of the @Anjan-ParaFi’s proposal on asset specific allocation and reading @TokenBrice’s thoughts I would say that most liquidity that a liquidity protocol such as the Aave Protocol needs is stablecoins - incentivised as diversely as possibly and also encouraging stablecoins that are aiming towards decentralization such as RAI.
I would not either go too much into rewarding assets that are more used as collateral and are already been listed long time ago unless if that particular asset-linked community is strategically important for the Aave community - I would rather incentivise new listed assets with fixed time period to kickstart supply liquidity and extend governance power and ownership of the protocol to that new community, this would also bring more diversity to the community.
In terms of GUSD - I haven’t seen substantial growth of the stablecoin across DeFi, however supporting it does bring more diversity. Maybe GUSD incentives could be directed to RAI for the time being and continue experimenting.
Would also say that liquidity mining on Aave Protocol indeed has been very successful experimentation and brought the protocol to become the biggest and most utilized protocol in DeFi - would also see the recursive borrowing more as a practice for capital efficiency than anything else for now and the @TokenBrice’s point on the increased surface for coverage is valid point but which can either be serviced by increasing the current rewards to increase the supply in to the SM or by bulking up the risk parameters on liquidations on less liquid assets - the technical risk of the protocol should anyways decrease over time, which means that the risk of slashing in large amounts decreases (but is not 0 in any case).
Another thing to consider is that the Aave Protocol is becoming more self-sustainable than ever before, meaning that the RF collected can be used in the future in various ways and essentially means that the DAO itself can hire developers through Developers DAO, a potential sub-dao for the Aave DAO, which would allow more craftier proposals to be made by the community such as the idea of HF-based liquidity mining rewards.
Summa summarum, I would support the continuation of the LP rewards for the next 3 months or even by end of the year with adjustments and recommendations from the community that are easy to implement - such as decreasing or removing GUSD, adding RAI (small amount), increasing the total emissions slightly on SM to increase the SM capitalization.
During this next 3 months - the community could use the time to come up with more craftier proposal where there could be more creative ways to manage the rewards distribution (HF-based incentives, staking StkAAVE or something else).
