The value of LuaSwap depends on a few following factors:
- Total value locked (TVL): this creates liquidity needed for trading
- Total fees earned: this is the real revenue going to the system
- Number of active users: this potentially translates to more trading and higher total fees earned
This proposes a change in the current reward plan divided equally to pools (allocation point can be adjusted) to a system where LUA reward is earned depending on the amount of liquidity provision regardless of pools. There are pro and cons for either plan, however we can consider which one is better at raising TVL, fees earned etc.
We plan to use one version of this proposal when launching LuaSwap in late October.