Prop 400: Phase out 1 and 7 day liquidity bonds

Summary

By voting YES on this proposal, Osmosis stakers signal their support for the removal of incentives from existing 1 and 7 day liquidity bonds of and stopping the creation of new 1 and 7 day liquidity bonds.  

Details

1 and 7 day bonding have seen minimal usage by liquidity providers. Currently, around 1.6% of liquidity uses 1 day bonding and 2.1% uses 7 day bonding according to weighted statistics derived from Dexmos.app.   The usage of these distracts from the long-term focus of the Osmosis DEX and with the addition of Concentrated Liquidity strategies in pools, standard AMM liquidity is most suitable for more passive liquidity providers who are willing to bond for longer periods of time.    Previously we at Notional have supported a "time value of money" and "risk pricing" concept, as can be seen here: https://commonwealth.im/osmosis/discussion/3921-time-value-of-money https://commonwealth.im/osmosis/discussion/4560-risk-pricing-of-delegations Both of these past proposals can be seen as encouraging proportionality.

That said, both of the above proposals make users think and choose more. We believe in sane defaults: https://github.com/osolmaz/sane-defaults In this case, the sane default is 14 days. Aligning 14 day bonding with 14 day staking has the additional benefit of promoting the use of superfluid staking.

This proposal is designed to come on-chain before https://commonwealth.im/osmosis/discussion/8894-automatic-staking-of-lp-rewards-to-validator-set-preferences so as to inform decision-making on it.

Target on chain date: January 18, 2022

Implementation

• Users should be able to keep their 1 and 7 day lp positions without modification.
• After the v15 or v16 upgrade, no new 1 and 7 day lp positions should be creatable.
• Incentives should be removed from 1 and 7 day bonds.