Mark11
"the pool has a potential for high IL as we have literally discussed before if OHM price increases"
I don't want to rehash the same argument we had in the Discord server and I think we should agree to disagree on this point. If we were to break out of the upper wall there would be ~0.5% IL for that pool, and if OHM were to double in price (which would be huge considering RBS mechanics) the IL would be ~5%. As an LPer those numbers are very low and I personally think it's pretty unlikely for the OHM price to double on any reasonable time frame.
I do agree with your other points about the commitment and ease of access, as I mentioned before.
"Under the alternative scenario I suggested it isn't traditional liquidity mining because the OHM holders would absorb the volatility and the non-OHM asset just deposits and receives extra rewards."
Maybe I'm misunderstanding your proposed idea, but how does this not turn into de facto liquidity mining? We would need to incentivize both wstETH deposits and OHM deposits. And yes, you can play around with the incentives and IL split between both groups but the fact remains that we now have to incentivize more, which makes the PMF more questionable. For the OHM depositors we would need to beat whatever the staking rate ends up being + compensation for the IL/volatility risk on top which, for a ETH pair, would be quite high. For the wstETH depositors we would need to incentivize up to the extent that it beats existing opportunities in the market and there are numerous alternatives.
In fact, it sounds to me that what you're describing is Ondo v1 style vaults. While we might be able to improve on that product, those vaults never really found PMF and are now defunct for various reasons (if I remember correctly, a large part was due to the high realized IL and losses for the variable side - OHM in this case).
The idea of this product is that it makes attracting liquidity significantly cheaper for partner protocols and if instead of making it significantly cheaper, we only make it marginally cheaper (because we now need to incentivize both sides), then I don't know if this product will be attractive enough vs. existing solutions.
"There is an alternative and potentially superior, more scalable and OHM holder aligned product which I have suggested which deserves to be considered and not dismissed outright"
I'm not trying to dismiss it outright. I realize that all nuance is lost in textual communication but I do really appreciate the comments!