This proposal would create new Volume Splitting Gauges encompassing a more comprehensive range of pools grouped by a shared asset. /n/n## Background /nOver the last six months, Osmosis has seen a general trend towards Stable pairings, particularly USDC pairings, in more established tokens. Contrary to this, OSMO pairings have found a niche in more volatile pairings due to the reduced impermanent loss from pairing with an asset with increased market exposure. /n/nVolume Splitting Groups are currently split into several main categories: /n* WBTC/OSMO /n* WBTC/STABLE /n/n* ETH/WBTC /n* ETH/OSMO /n* ETH/STABLE /n/n* ATOM/OSMO /n* ATOM/STABLE /n/n* TIA/OSMO /n* TIA/STABLE /n/n* OSMO/STABLE /n/n* STABLE/STABLE /n/n## Incentive Direction /nThe Incentive Algorithm/'s trend in incentivization has been to increase the incentives allocated to Stable pairings and decrease those going to the OSMO pairings at the monthly adjustment. The exceptions to this rule have been the STABLE/STABLE and OSMO/STABLE pairings, which have both increased and the TIA pairings, which have increased due to insufficient liquidity overall. /n/nThis monthly adjustment has resulted in the ratio of incentives going to non-OSMO pools increasing as follows: November 2023 - 7.8% /nDecember 2023 - 8.5% /nJanuary 2024 - 10% /nFebruary 2024 - 12.6% /nMarch 2024 - 22.9% /n/nThe forecast for April 2024 is currently 26.4%. /n/n## Incentivizing Non-OSMO pools /nIn the previous incentives Category system, Osmosis governance has shown reluctance to incentivize non-OSMO pools by capping these pools at 5% of total incentives. /n/nSince the introduction of Supercharged liquidity and Taker fees to Osmosis, these pools have become more attractive to incentivize. /n/nSupercharged liquidity pools are more user-friendly when denominated in Stable assets, and traders often wish to work to and from Stable assets, increasing the demand for liquidity in these pairings on chain. /n/nWith Taker Fees, the protocol earns a share of every trade performed on a chain. When obtained in non-OSMO assets, this share is either retained by the community pool (33%) or used to buy back OSMO before distribution to Stakers (67%), offsetting the inflationary emissions of incentivization. /n/nThis proposal would create new Volume Splitting Groups, which would group pools by a common asset. This would allow the market to more rapidly decide whether a Stable, OSMO, or alternative pairing is preferred for a specific asset, as Volume Splitting Groups adjust incentives daily rather than monthly. /n/n## Proposed Groupings /nWBTC/nCombining/n* WBTC/OSMO (1432, 1433, 1434) /n and /n* WBTC/STABLE (1435, 1436, 1437, 1438, 1439) /n/nETH /n combining /n* ETH/WBTC (1440, 1441) /n and /n* ETH/OSMO (704, 1134, 1281, 1477) /nand /n* ETH/STABLE (1264, 1278, 1279, 1280) /n/nATOM /n combining /n* ATOM/OSMO (1, 1135, 1265, 1399, 1400) /n and /n* ATOM/STABLE (1078, 1079, 1251, 1282) /n/nTIA /n combining /n* TIA/OSMO (1248, 1249, 1347) /n and /n* TIA/STABLE (1247, 1321, 1322, 1348, 1478) /n/nThe proposed changes can be viewed on this spreadsheet /n/nBased on volume, the adjustment at implementation would be around a 50% increase in the incentives allocated to non-OSMO pairings in these groups and a 10% decrease to those assigned to OSMO pairings. /n/n## Addendum/nThis proposal will also perform maintenance on the VSG for the OSMO/STABLE grouping intended to be created in the successful Proposal 740. Pool 1066 was omitted from the transaction in error and is currently unincentivised. /n/nForum Thread: https://forum.osmosis.zone/t/merge-volume-splitting-groups-by-shared-asset/2562