BIP-77: Sonic Expansion – $BEETS on Sonic: Proposal for Emission Management and Budgeting System

Summary

This proposal seeks to formalize the discussions around changes to BEETS tokenomics on Sonic for consideration by maBEETS holders.

Proposal

Objective

The goal of this proposal is to implement a flexible emission and budgeting system for BEETS on the Sonic network, transitioning away from the fixed emission schedule currently in place. This new system will provide governance-controlled flexibility, enabling the protocol to adapt emissions to changing market conditions while safeguarding the token supply and community interests.

Key Proposal Elements

1) Quarterly Budgeting: Every three months, the Music Directors will present a comprehensive BEETS budget for community approval. This budget will outline:

• The number of BEETS to be minted for the following quarter.
• The specific allocation of those BEETS within the ecosystem. This quarterly system allows the protocol to adjust emissions based on real-time needs and market conditions, avoiding rigid schedules.

2) Emission Control: To protect against governance attack vectors, the token contract will enforce a hard cap on inflation of 10% per year, which corresponds to the inflation rate at the end of 2024.

3) Flexible Emission System: Minting of BEETS tokens will occur only through governance approval by maBEETS holders. This ensures that the community retains full control. There will be no uncontrolled inflation or open-ended token supply. A cap will always exist, adjustable based on governance votes.

4) Revenue Allocation: In addition to emissions control, the quarterly budget will outline how protocol revenue is allocated. maBEETS holders will vote on revenue distribution to ensure that funds are used in a manner that benefits both the protocol and the community.

5) Emission cut-over: Once the Sonic network launches and maBeets migration is open, BEETS emissions on Fantom will stop and the first quarterly budget plan goes into effect on Sonic.

Framework for BEETS and Revenue Allocation

A framework will be established to ensure that all BEETS emissions and revenue allocations are aligned with the protocol’s goals and the interests of maBEETS holders. The following categories are proposed for support through BEETS emissions and revenue: BEETS Emissions:

• BEETS to Treasury
• BEETS to Farms (liquidity mining rewards)
  • maBEETS Farm (incentives for holding)
  • Gauge Vote Farms
• BEETS to sFTMx / Beethoven X's Sonic LST (strategic inventives)
• Discretionary budget for Music Directors
  • BEETS to Farms (liquidity mining rewards)
  • Other

Revenue Allocation:

• Treasury (for future growth)
• maBEETS incentives
  • Gauge Votes
• sFTMx Coalition (partner initiatives)
• BEETS buy back