Imo too much gets waisted on ALGO-gALGO pools to even make gALGO a viable LST + enable leverage gov with the help of lending pools. Looking at something like volume those pools don’t get utilized a lot, it’s just dead liquidity that is needed such that gALGO even works. Additionally, gALGO liquidity in general doesn’t “stick” since gALGO needs to be redeemed if you want to continue earning governance rewards. So those DEXs and FF will loose that liquidity immediately after governance ends.
29.33% of rewards are being used for gALGO-ALGO pools and only 16% for the most important one the stableswap pool on pact. Stableswaps are so efficient that the other incentivized lending pools on pact and tinyman dont help really with the stability of gALGO. Those lending pools help mostly with liquidity for users who want to use the heavily promoted “leveraged governance” which means it just enables milking even more governance rewards for those users. In the last period 9 those users did loose out on 10% of their rewards because people just use this product without thinking about potential risks it seems and the interest rates staying pretty high this time.
These gALGO-ALGO pools just pay existing algorand users to stay and farm defi boost incentives instead of having a real chance to attract new users. Also those users risk nothing as ALGO-gALGO is a safe bet besides smart contract risks.