BIP-91: Closing Backwards BEETS Migration and Optimism Liquidity Management

Proposal

This proposal asks the DAO to approve the following actions regarding bridging BEETS tokens and the legacy BEETS versions on Fantom and Optimism:

1. Prohibit converting Sonic native BEETS to lzBEETS, effectively closing off the possibility to bridge BEETS to Fantom and Optimism in its legacy form. Important to note, that bridging TO Sonic and converting it to Sonic native BEETS will stay open.

2. Bridge the current DAO holdings of BEETS tokens to Sonic and convert them to Sonic native version, to be stored in the DAO Sonic treasury. Currently, the DAO treasury holds ~61,872 BEETS in Fantom treasury, ~1,193,539 BEETS in Optimism treasury and ~5,931,232 BEETS in Optimism BEETS/rETH LP. Proposal will also allow to bridge and convert any additional BEETS that the DAO might earn through fees on Fantom and Optimism.

3. Approve setting up a new bridge for bridging the Sonic native BEETS between Sonic<>Optimism. Bridging the new version to Fantom will not be set up.

4. Approve deploying a 80/20 pool on Optimism, where the new BEETS version on Optimism will be paired with wETH or a suitable Ethereum based LST/LRT (decided by the MDs once everything is ready). Additionally approve seeding that pool with up to $100k from DAO treasury.

Motivation

The proposed actions are taken to move forward from the legacy BEETS versions currently on Fantom and Optimism. We predict the amount of migrations to decrease over time, which at some point would allow Beets to fully adopt the Sonic native version and its bridged versions as the only BEETS token. For now, it will still be possible to bridge the legacy versions to Sonic and convert them to Sonic native tokens.

Impacts / Risk Assessment

The main impact will come from the price of the current legacy versions differing from the Sonic native version, since prohibiting converting Sonic native BEETS to lzBEETS effectively stops continuously arbitraging the token prices to balance. It’s possible this creates some confusion, since users might still buy the legacy versions on Fantom/Optimism and potentially get worse trade then they would by buying the Sonic native version. Beets contributors will try to alleviate this impact by announcements and efforts to distance the legacy version from the Sonic native version.

Specification / Execution Plan

With the passing of this BIP, the contributors are given approval for conducting the proposed actions. Actions 1) and 2) can be carried out pretty much immediately after passing of the BIP, actions 3) and 4) will take some time to implement.