Here’s some basic modeling on the APYs based on @followthechain & @Callum’s system + along with examples of existing pools that could qualify under each tier as described.
Two of the Tier 1 pools - BAL/ETH + WBTC/ETH - will take a hit in yields whereas returns on the primary stablecoin pool (either USDC/ETH or DAI/ETH) and the DAI/USDC/USDT will be substantial. I think this is a solid dynamic as it will drive more USD liquidity to Balancer as well as have a significant amount of BAL to bootstrap the USD-pegged stablecoin pool that’ll launch with V2.
The Tier 2 + 3 selected pools will also see some very solid returns at current liquidity and BAL price, making them competitive with Sushiswap. What’s nice about the tiered system is that governance has the ability to allocate these rewards for projects that synergies well with Balancer and can help decentralize the BAL LM allocation to better align communities.
Based on the above, I support this tiered proposal paired with an active Ballers governance committee at the above allocations! Generally, all of the yields line up as long as the Tier 2 + Tier 3 groups are managed well 