Thanks for the great questions and analysis. A couple of points just to make sure we keep aligned on the purpose here.
The original proposal made clear that we would be focusing on actively managing our capital to support our goals. Attracting top builders is absolutely a top priority, and both were included in the proposal
CEX bots will continue to operate through the pool and pay fees to the liquidity provider (us!). Individual trades don’t happen in isolation and bots will extract value from the pool, but larger liquidity reduces the amount of value bots can extract (lower price movements means smaller arb opportunities for bots)
The whole other argument is a core UX issue we made the proposal to resolve 
I love the hacky nature of startups as much as anyone, but it is at odds with the Capital Markets Advisory Board’s ambition to have Tier 1 Capital Practices. Incremental sells can work to reduce slippage of course but makes us seem a bit unserious
Arrakis covered some key considerations about analysing impact and performance, but to me “generate fees” is a nice outcome of protocol owned liquidity rather than a core objective of this proposal. We can make generating fees a more prominent objective if there is a strong desire to do so, but an increase in fees this way is increased costs (relative to 0.3% fee) for participants… I’m not sure that is a net benefit