I believe we can improve ACX liquidity while also paying for bridge liquidity - killing two birds with one stone.
We should pair ACX with Across LP tokens such as USDC, USDT, DAI, ETH, and WBTC on Balancer and incentivize that under a single reward locking mechanism that distributes ACX incentives. This will mean we’re paying for bridge liquidity and ACX liquidity in a single swoop. This will also be an example to the broader ecosystem that Across LP tokens can be used as superfluid collateral to earn yield.
I’ll consider the exact incentive amount and distribution between the Across LP tokens as follow-on considerations, but I believe this idea is significantly better than incentivizing ACX liquidity and bridging LP tokens separately which significantly hurts ACX’s tokenomics.
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I forgot to reply to this idea. Wouldn’t we need pools for Across LP tokens against WETH or USDC? In order for there to be liquidity to trade ACX vs ETH or USDC we would need to make Across LP tokens liquid as well. This seems very tricky. I think trying to figure out how to use Across LP tokens as collateral to borrow could be a starting point, but that I already see has some issues/concerns.
It’s an interesting idea though.
CoW searchers or aggregators can simply add the functionality to withdraw from the Across LP tokens as needed within the swap transaction. For example, if ACX is paired with the Across USDC Bridge LP, then unwrapping is done as needed at the time of the swap so that the user always gets USDC or ACX, not the intermediate bridge LP.
Main downside is that it adds gas to swaps, but I think the pro of matching bridge liquidity with ACX liquidity outweighs that con.