Having just read the full proposal, I agree that option 1 would be the best option, however I think that some kind of long term holder increase to the APY may also be a good idea to incentivise people to hold there sOHM long term.
Example:
After holding for 1 week = APY bonus increases to….
After holding for 2 week = APY bonus increases to….
After holding for 3 week = APY bonus increases to….
APY bonuses increase every week up to maybe week 10, at which point the accrued APY bonus levels out and stops increasing. The Bonus APY would be at a low sensible and constant rate, and be separate from the Main APY. The main APY would obviously be variable as per option 1. The Bonus APY would restart from week 0 if you unstake and restake.
Might be a way of attracting some long term big fish / whales.
Food for thought guys. 🤓