We are gearing up for the 2nd Batch of the Polkadot Hydration Campaign Incentives, tentatively starting on 11.09.2024.

For this batch, the HDX incentives will again be sourced from the Growth portion of our HDX supply, and the vDOT incentives will come from the Polkadot Hydration: Liquidity Incentives.

Key Discussion Points

1. Relative Distribution of Incentives:
   The TVL Utilization measures how effectively liquidity is used for trading, indicating the efficiency of liquidity deployment. Review my Hydration TVL Utilization Dashboard!
   RING and KILT are the lowest performers, while ASTR, PHA, GLMR, and DOT are performing very well and should be prioritized.
2. Focus on Money Market:
   With the upcoming launch of the Money Market (borrowing & lending), we need to focus on:
   • DOT
   • BTC (2-Pool iBTC/WBTC)
   • Stablecoins (2-Pool, maybe 4-Pool?)
3. Bifrost LST Tokens:
   Discuss the prioritization of Bifrost LST tokens, specifically vDOT and vASTR. Should we give these tokens priority? Bifrost currently adds additional BNC incentives and we are aligned with common strategic ecosystem goals.
4. Special Considerations for ZTG:
   ZTG might require special attention due to its very low liquidity on CEX (Gate). The Omnipool has become a primary source of exit liquidity, allowing early investors and likely team members to achieve better exit rates than they could have on Gate. It might be reasonable to consider reducing incentives.
   EDIT: With the new Incentive Utilization metric, I don't think we need to give special consideration to ZTG anymore. We could, for example, apply a ^2 exponent to the relative performance of each asset to give high performers a greater boost. In my opinion, incentives do not affect the risk profile of ZTG in the Omnipool, which is primarily defined by the lack of arbitrage opportunities due to low CEX liquidity.
5. Incentives for MYTH/DOT Pool:
   Despite not being part of the Omnipool, the MYTH/DOT pool should be considered for a reasonable incentive due to its strategic importance and multiple CEX listings.

Please share your thoughts on how we can best allocate the incentives and ensure a balanced approach that supports both our strategic goals and effective liquidity utilization.

Looking forward to your feedback!