At the moment pdex is the most significant application on incognito. If we argue that staking (and running a node) is for the safety of the network, then pdex liquidity is for the vitality of the network. If people who “stake” get rewards, why shouldn’t who “provide”?
An AMM needs both liquidity and arbitrage in order to attract users. Charging a percentage fee based on trading volume of the latter and give them to the former isn’t fair, because the volume on the latter is many times bigger than the former. Actually it is 5 times according to incscan.io, but the site lacks duration or per-pair data.
Alternatively pdex can waive trading fees for those who provide, or for those whose trading volume goes above certain threshold. I’ll be fine if we do this, but such rules can become complicated (see for example trading fee structures on binance or coinbase), hard to implement, or go against privacy.