At the moment rETH is not a liquid staking token, to be described as such requires a reasonable expectation of liquidity.
It may be tempting to point to market action and sentiment to explain away this issue but it is better described as the result of a long term disregard for the importance of this key aspect of protocol health.
Aside from a few integrations spearheaded by exceptional effort from community members, rETH is completely absent from DEFI in any meaningful way and this is largely a self-inflicted problem.
I would contest that if long term the majority of rETH is simply being held in wallets then the protocol has failed to live up to a fraction of it’s promise & potential.
In my mind this is relatively straightforward:
We must have integrations for Rocketpool to be successful.
We can not achieve integrations without liquidity.
Trading volume alone is not sufficient to attract liquidity regardless of timeframe.
Liquidity incentives have proven to be extremely effective at attracting liquidity.
If we are willing to spend resources to increase demand for rETH and raise awareness for the protocol in general, incentives are the most cost effective way to do so.
Regarding the questions for discussion.
While I am in favour of reducing the oDAO allocation, discussion of their budget, whether to expand it or not, defined duties, penalties and timeline for potential sunsetting should be a separate topic so as not to create a direct link and conflate things.
I would support an increase in inflation if required to pay for an increase in growth of the protocol through incentives. That being said, If going that route, I would favour a general increase to the pDAO rather than earmarking for specific things, that should be decided downstream.
Considering such a change is likely to be contentious, I would suggest that it isn’t required for movement on this issue in the short term.
When it comes to incentives, going from 0 to 1 makes the largest amount of difference with steeply diminishing returns, so before committing to a change in distribution I would like to see the impact of using a relatively small amount of incentives from the pDAO and observing the outcome.