UPDATE: While NOT specified either way in the above post, I've since been told that the proposed BEE awards for liquidity providers will not be volume-based, so the wash-trade based attack I outline below would not apply. I have left it in place for transparency.
Don't award Diesel liquidity providers with BEE because it's gameable.
If the rewards are volume-based and feeless then there is a wash trading situation.
Here's how: Create two coins and a pool (1200BEE) make the coins untradeable and issue all the coins to myself. e.g. CANCER<->SHITCOIN. Deposit most of CANCER and SHITCOIN into the pool. Here's the game: trade my CANCER for SHITCOIN and back and forth as fast as the blockchain allows. Now the pool's had a ton of [wash] volume. How then is that pool evaluated against legit pools for BEE rewards.
Better to offer %trade fees settable at pool creation and maybe either a permanent lock or the pool creator has to pay BEE to modify the pool fee schedule (and the change is time locked forward). A scheme to reward liquidity providers with a third token is also a great idea, though the pool creator has to supply those tokens (via inflation or a reserve).
I'm working on an article (any day now) about why zero swap fee pools are a bad idea that results in very low liquidity and high slippage. Zero-gas fees are awesome. Zero swap fees are not.
I'll wait until further details are public before commenting further except to say that I am generally sceptical of decoupling desired behaviours from their rewards.