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

**URL:** https://gov.liqwid.finance/t/strategic-reallocation-of-lq-incentives-to-stablecoin-liquidity-pools-via-ecosystem-partnerships/1850
**Category:** Temperature Check
**Created:** [May 9, 2025, 10:16am UTC](https://gov.liqwid.finance/t/strategic-reallocation-of-lq-incentives-to-stablecoin-liquidity-pools-via-ecosystem-partnerships/1850 "2025-05-09T10:16:09Z")
**Posts on this page:** 3
**Page:** 1

<div class="post-metadata">

### Author: ![Rschwab](https://yyz2.discourse-cdn.com/flex010/user_avatar/gov.liqwid.finance/rschwab/32/508_2.png) [@Rschwab](https://gov.liqwid.finance/u/Rschwab)
#### Post date: [May 9, 2025, 10:16am UTC](https://gov.liqwid.finance/t/strategic-reallocation-of-lq-incentives-to-stablecoin-liquidity-pools-via-ecosystem-partnerships/1850/1 "2025-05-09T10:16:09Z")

</div>

# 📜 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.

_Poll ([view on site](https://gov.liqwid.finance/t/strategic-reallocation-of-lq-incentives-to-stablecoin-liquidity-pools-via-ecosystem-partnerships/1850/1))_

---

<div class="post-metadata">

### Author: ![itzDanny](https://yyz2.discourse-cdn.com/flex010/user_avatar/gov.liqwid.finance/itzdanny/32/746_2.png) [@itzDanny](https://gov.liqwid.finance/u/itzDanny)
#### Post date: [May 10, 2025, 10:07am UTC](https://gov.liqwid.finance/t/strategic-reallocation-of-lq-incentives-to-stablecoin-liquidity-pools-via-ecosystem-partnerships/1850/2 "2025-05-10T10:07:51Z")

</div>

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.

---

<div class="post-metadata">

### Author: ![Blockjock](https://yyz2.discourse-cdn.com/flex010/user_avatar/gov.liqwid.finance/blockjock/32/628_2.png) [@Blockjock](https://gov.liqwid.finance/u/Blockjock)
#### Post date: [May 15, 2025, 1:04pm UTC](https://gov.liqwid.finance/t/strategic-reallocation-of-lq-incentives-to-stablecoin-liquidity-pools-via-ecosystem-partnerships/1850/3 "2025-05-15T13:04:15Z")

</div>

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.