Strategic Reallocation of LQ Incentives to Stablecoin Liquidity Pools via Ecosystem Partnerships

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:scroll: Proposal: Strategic Reallocation of LQ Incentives to Stablecoin Liquidity Pools via Ecosystem Partnerships

Introduction

This proposal aims to improve LQ token liquidity and expand the reach of the Liqwid DAO within the Cardano DeFi ecosystem by partially or fully reallocating LQ rewards to liquidity pools paired with stablecoins.

Objectives

  • Increase the overall liquidity of the LQ token
  • Enable efficient swaps between LQ and stablecoins
  • Support the adoption of Cardano-native stablecoins
  • Boost trading volume for the LQ token
  • Improve price stability in the secondary market

Proposal Details

1. Target Pools for Incentivization

The following liquidity pools will be evaluated:

  • LQ/USDA on Minswap
  • LQ/USDM on Minswap
  • (Optional) LQ/USDC on Minswap
  • (Optional) LQ/EURC on Minswap
  • (Optional) LQ/PYUSD on Minswap

The initial pool to be prioritized will be selected based on the following criteria:

  • Current liquidity levels in the Cardano ecosystem
  • Strategic relevance to the Liqwid protocol and its community
  • Potential for joint incentive partnerships with the issuer of the selected stablecoin

Note: Stablecoin issuers should be contacted to assess their willingness to co-sponsor farm incentives. Synergistic dual incentives could be beneficial for both LQ and the respective stablecoin.

2. Incentive Mechanism

  • Allocate 25% to 100% of the current monthly LQ incentive budget (approximately $6,250 to $25,000 in market value)
  • LQ will be distributed as rewards to liquidity providers (LPs) in the selected pool

Justification

The current incentives allocated to stablecoin deposits in Liqwid markets are no longer essential and could be more effectively redirected to initiatives with higher impact.

Liquidity is a fundamental pillar of any token’s utility and market health. With the arrival of native stablecoins such as USDA and USDM, Liqwid is well positioned to become a central hub for stablecoin lending and farming on Cardano.

This proposal seeks to optimize the distribution of LQ incentives to strengthen the protocol’s tokenomics and enrich the surrounding ecosystem.
It also aims to foster the adoption of Wanchain-issued stablecoins—USDC, EURC, and PYUSD—within the Cardano ecosystem, thereby driving user engagement and increasing activity in Liqwid’s lending and borrowing markets.

Conclusion

This proposal aligns Liqwid’s incentive strategy with the broader growth of Cardano DeFi, supporting deeper and more stable liquidity pools that benefit both users and liquidity providers.
The approach is flexible, guided by transparent criteria, and grounded in impactful ecosystem collaboration.

  • yes
  • no
0 voters
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i voted no, mainly for the following reason. while im not against reallocating some or all of the LQ incentives but i personally would like to see them boost Liqwid markets and tvl rather than dex’s.

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3

This looks like a good proposal, there isnt much risk in doing it and it will benefit LQ holders “Long Term” Increasing overall pairs is always a good thing. Accessing liquidity on dex’s using the premier L&B on Cardano can only be a good thing.

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