This is a great topic of research @Miaki, the positive slippage treasury can surely play a role in shaping the incentivization efficiency of the protocol.
A few thoughts/ideas based on the various comments:
Staking Rewards: I agree that the amount at stake is negligible. Based on the 70M PSP staked, a run-rate pre-market correction revenue of circa $200K per month (2.4M/year) doesn’t improve materially the stakers APY, meaning that you don’t change the incentive structure event if distributed in ETH (for small stakers, the amounts at too low to be claimable).
What can be done is to limit the distribution to “Level 4 NFT” Holders (see gas refund proposal here). If only 10-20% are eligible, then you 5-10x that APY. That would incentivize volume and staking from big players on the long run.
Market making: Not sure if this can be implemented, but considering the number of valueless tokens, could we consider proposing these tokens at sale during swaps for ETH/USDC at the best price like a market maker? This would avoid supporting the gas costs, increase the overall treasury, and reduce its volatility to market conditions. Eg. I swap ETH for VADER on Paraswap and the contract sells VADER it to me from the pos slippage treasury at the best market price.
PSP Buyback: I’m not a big fan of that idea. It’s well practiced in TradFi and I think it skews price signaling in markets as it artificially pumps up the price. It’s not a sustainable way to build demand for PSP in my opinion.
CVX: I also think part of the treasury should be used to build a CVX position with the launch of Curve V2 but the liquidity strategy has to be designed at the macro level. @tokenbrice has certainly reflected on this.
Future Capex: There’s the alternative, leave the treasury there (preferably in ETH/USDC) to fund future developments that can’t be funded by the company without additional fundraising. Having a war chest during adverse market conditions is often a condition for survival.