Estimate seems high - there was the 10M in the Stableswap pool from the 20M spend, this will have compounded slightly though.
Then another ~1.2m from the boneOSMO and ampOSMO sides of the SAIL provisions.
Since it doesn’t directly vote it doesn’t directly influence voting power, however of course it does influence voting power by the delegates (probably the ampOSMO and boneOSMO moreso since their sets are very limited so far).
I do believe that the community pool should hold zero liquid staked OSMO unless we actively want to pay Liquid Staking Protocols for extra security.
Removing this all at once is excessive though and we should trend towards this.
The point of Re-evaluation of Liquid Staked OSMO held by the Community Pool is to start the process of diversifying the stake rather than remove it entirely.
Over the next few months, the positions will gradually return to OSMO as the redemption rates increase and a more general subsidy model should be proposed to tackle the trend towards single LST domination.
In my opinion, the best possible model for this is Osmosis holding 0 LSTs.
Positions should be in vaults which have upper positions tracking the market rate and automatically auto-arbitrage any LST acquired until the market rate = redemption rate - swap fee.
Any purchase that took the LST over this point should be treated as a new mint and routed as such, eliminating the need for liquidity over the redemption rate and so for the Osmosis community pool to supply liquidity in the form of the LST rather than just OSMO.