Summary (tl;dr)
This proposal requests UTXOs on the fee switch address be consolidated at the beginning of each month to free up locked ADA in UTXOs (given there are sufficient number of UTXOs to make this feasible). The ADA gained from the consolidation should be used to zap in more liquidity to the MIN/ADA pool.
Details
In the recent Emissions and Treasury report, one of the discoveries that fell by the wayside was the discovery that there is a significant amount of ADA locked into LP UTXOs. As many of you may know, all UTXOs with a token require a certain amount of ADA to be locked into the UTXO.
https://docs.cardano.org/native-tokens/minimum-ada-value-requirement/
The fee switch sends LPs from each pool as soon as the fee switch value from each pool reaches 100 ADA in value. The LP is then converted to ADA/MIN LP. Each time this happens, a new UTXO is created with ADA/MIN LP tokens and a small amount of ADA is locked into the UTXO.
We originally discovered this while doing research on the fee switch address, and at the time there was 9k ADA tokens locked into UTXOs. It looks like since then, they have already consolidated the UTXOs once, since there are currently 2k tokens locked in UTXOs.
I think there are a lot of variations on how this could be implemented. It could be done once a month, once a quarter, when a target threshold of locked ADA is reached (maybe 1k ADA). However, I think having a well defined method to consolidate UTXOs will help make the most use of funds in the fee switch so that it does not get overlooked in the future.
For reference, the fee switch address: