It is already currently planned to provide some amount of BOND token reward to incentivize jToken acquisition and holding. This proposal suggests that we should implement a variable incentive (e.g. total BOND reward per week can vary between x and y), rather than a flat incentive (e.g. total BOND reward per week is x every week).
A MultiSig team (suggestion 3 of 5), will be empowered to adjust the jToken incentive. They can adjust it up or down depending on market demand. The DAO will elect this team, as well as the maximum amount of BOND reward that can be distributed to jToken stakers. The MultiSig team will only be able to affect the rate of BOND token reward distribution (e.g. the amount of BOND distributed on a weekly basis).
jToken incentive must be sufficient to ensure liquidity for sBOND creation. Depending on sBOND demand, it may be necessary to drive further jToken liquidity at short notice. An increase of jToken BOND reward via the DAO will be a longer process than what can be accomplished by a MultiSig team. Additionally, we do not want jToken incentivization to “steal” too much liquidity from Pool 2, which provides Uniswap BOND token liquidity.
The MultiSig team would form a SquadDAO and conduct private and public meetings as necessary to determine when an increase or decrease to the weekly jToken incentive is necessary. The initial jToken BOND incentive would be established by the DAO.
Quickly adjust jToken incentive
Ensure balance of jToken reward with other market factors
MultiSig team could go rogue and mismanage funds
Variable incentive is unnecessary complexity
Confusion or frustration from jToken stakers due to fluctuating BOND reward