Most DeFi protcols follow one of two different approaches to incentivizing liquidity.
The typical rug pull: Offering very high temporary reward pools for supplying liquidity. This is bad because once rewards dry up, so does the liquidity and ultimately the token price as holders sell when the reward period is over.
The infinite supply and disregard for early holders: Offering infinite rewards through minting contracts. This is also bad as it makes the token inflationary, poses exploit risks, and has no capped total supply. As more tokens are added, holders balances are diluted.
xTAO solves both of the problems mentioned above and introduces a new approach for not only incentivizing liquidity, but also incentivizing volume and the percent of tokens being locked. This approach provides a ecosystem that is 100% community oriented and allows for partnerships with other projects without ever diluting holders or minting new tokens.
As mentioned before, xTAO is complete at launch and anyone can build on top of it. Here are some approaches that the xTAO community could take:
Having tokens and projects pair with xTAO. This provides benefits for both Tao and the token pairing with it as all transactions going through this pair will be generating fees that are then re-distributed to all holders of xTAO.
Bringing more users onto xTAO's AMM. One thing that exchanges have lots of is volume, and more volume = faster burn rate and more rewards for holders.