If our objective is to bring DeFi votes into governance as key ecosystem players then I believe systems such as those of liquid governance will be better suited for it than a system of auditing LPs that will always bring with it more complexity and more controversy as some LPs/ASAs will have to arbitrarily be cut off. Right now a little under 10% of the governance committed is in a liquid governance product, so the alternatives within DeFi are there, for those who want to cast a vote whilst maintaining liquidity to participate on DeFi at a relatively low cost. We can even build tools (such as decentralised aggregators and stable swaps protocols) to address potential liquidity fragmentation and lower the barrier to governance even more with minimum development efforts. So if DeFi users want a vote, they have an avenue for it.
Now, if we want to give a voice to DeFi players (and other community members) I believe it is through opening up of governance proposals (I’m reminded of things like https://cardanocataly.st/ or other DAO-like forums such as those on Snapshot , with Gitcoin being a personal favourite of mine), that we achieve this. We can even have the oversight of the foundation first and then aim to give the role to xGovs and other ecosystem leaders over-time. I believe in the long-run these type of measures will create easier to track KPIs than the current method, where it’s extremely hard to separate who participates out of interest and who’s just seeking yield/rewards.
Textually, my main worry with both proposals is that we’re off-setting risk without necessarily benefiting from it (ie subsidising the costs, but not taxing the profits) and that we might not generate the engagement needed for an educated governance which I believe should be our long-term goal. But instead reinforce the belief that governance is just this yield you can passively get for participating on Algorand. It’s hard to reach a balance of engagement without overwhelming users, but that’s what we should aim for, since at the moment I feel most participation is yield motivated as opposed to decision-making motivated. But of course, I’m just going off of a hunch.