Another well explained and detailed insights in to the what, how and foremost the why! I'm very short with LeoFinance, and didn't sign-in to Leo Discord channel yet, therefore I do like this post very much.
Wrt using a portion of the inflation of Leo for incentives to liquidity providers, I think is a very good idea. Though I'm a small Leo owner, I like to provide some liquidity since I think (like you) it is super important the markets have liquidity. You mentioned that with eg less than 100$, providing liquidity may not be profitable. What is the minimum you think is required to be breakeven in lets say 180 and 365 days of providing liquidity? I have 1000 Leo ready for providing liquidity; Would that be something you would discourage, or encourage, ie is this a too low amount or is it sufficient in your view for providing longer term liquidity?
Wrt liquidity and the complexity when adding liquidity a 2nd and 3rd time on top of the previous provided liquidity. Why are formulas adjusted to reflect the total liquidity, and aren't the formulas applied per liquidity transaction? This would avoid to adjust the formulas, ie distribution and incentives are given based on a liquidity order instead of based on a user account.
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