I was originally going to say that OSMO pairs would be for swapping existing rewards, however these currently total $1,725k a day and the ATOM/OSMO pool has double that in daily volume so there is a substantial amount of trading going on which I imagine would be replicated in LUNA or UST pools. The 1000 Incentive was aimed at the pools all being similar in size to the current ATOM/OSMO by the time the APR was similar to Anchor’s returns.
As for a use case for the liquidity I think there may be some crossover with the superfluidity of pools and shared security being worked on beyond just a DEX listing. Sunny would be able to expand on this more however as I am just a community member.
Currently the default OSMO incentives work by comparing the 7 day volume/Liquidity ratio of a pool to the total 7 day Volume/Liquidity ratio across the DEX.
Pools with higher volume compared to their liquidity have a greater weighting to attract incentives to in turn attract more liquidity and reduce the slippage on trades.
Pools containing OSMO currently have 3 times the weight of pools without and new listings need a proposal to include pairs in the incentives calculations.
New pairings have a spike in volume so the incentives are eased into place over 5 weeks.
Week 1: No Incentives, volume/Liquidity found
Week 2: 25% Incentives
Week 3: 50% Incentives
Week 4: 75% Incentives
Week 5+: 100% Incentives
Any matching is re-aligned in value weekly and forms the new Minimum incentive for the duration.
Assuming the volume of the pools remains high the OSMO incentives would soon outstrip the matching. For comparison, Cosmos would currently need to be providing 29,000 ATOM per day to overrule what the normal incentive program currently gives that pool.
Osmosis will always have an incentive program as part of its tokenomics, following a yearly thirdening of distribution to approach the maximum 1 billion supply.