great observation. this is an intentional strategy.
most chains and apps incentivize, for example, a USDT-WBTC pool and a USDC-WBTC pool. it’s a big mistake.
instead concentrate incentives in a USDT-USDC pool and then in a USDC-WBTC.
the analysis is whether the slippage improvements will be less than any additional lp fees. my bet is that slippage will often outweigh additional lp fees so you are better off not having overlapping pools.
once again, @katana and core apps like @SushiSwap are ahead of the curve.
Some thoughts on Sushi rewards in Katana:
I noticed today that the ETH/USDC pool is incentivized, but ETH/AUSD is not. Meanwhile, AUSD/BTCk gets rewards, but USDC/BTCk doesn’t.
Seems like Sushi’s strategy is to avoid rewarding overlapping pools — like both ETH and BTC versus stables — to prevent splitting liquidity.
For stables, only USDC/AUSD and USDC/USDT are incentivized. There’s no meaningful AUSD/USDT pool — so no rewards there either.
It makes sense: AUSD is the stablecoin partner for both Katana and AggLayer, and USDC has historically seen more demand on Polygon. So Sushi supports both.
In short: Sushi is selectively incentivizing specific pairs, not everything across the board.
And for users, trades will just route through multiple pools if needed. For example, buying ETH with USDT would go via USDT → USDC → ETH. On a fast and cheap chain, the total cost is almost the same.
By the way, Sushi's TVL on Katana has already reached $43M 🍣
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