- Ultimately looking for how much “long term liquidity” we get per $ of HOP incentive - gets to a CAC/LTV type of view
Wallets with TVL which are correlated to this are mercenary wallets / deposits whose timing corresponds to high returns in are mercenary deposits that would be expected to increase in size if monetary value increases and decrease in size if monetary premium decreases.
I think it might be worth taking a step back to define what makes an LP “mercenary”. To me, a mercenary LP is one that dumps all of the protocol token rewards instead of holding them. They don’t care about building alignment with the project they are farming and have no stake in the project. This is a different from an LP that is sensitive and responsive to yields and may or may not have a stake in the project.
I don’t think we should think of liquidity mining as a way use high yields to attract LPs that will then stick around in a low yield environment either out of apathy or altruism. Instead, we should think of these subsidies as a way to accelerate growth across all of Hop’s markets (especially new ones) and support the markets that are not yet self-sufficient.
The cross-chain bridge market will likely grow orders of magnitudes over the next 5 years and HOP subsidies can help Hop maintain its market position during periods of high market growth.