Beets Budget 2025 Q1

Introduction

As discussed, Beets contributors and Music Directors are proposing to deploy a quarterly budget system. The goal 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.

Under this system, the Music Directors will present a BEETS budget for the DAO approval every three months for the upcoming quarter. The budget would outline the number of BEETS to be minted for the following quarter and their allocation within the ecosystem. In the following quarters it would also include previous quarter’s leftover BEETS to be repurposed and the amount of BEETS obtained through buyback. Additionally, the budget would also set the allocation of the protocol revenue for the upcoming quarter.

For the first such Beets quarterly budget, which would go live with the migration to Sonic, it is important to note the following points: (i) We would like to keep the schedule based on real yearly quarters, so the first budget would run into the end of March. This means the budget will last longer/shorter than exactly 3 months based on the timing of Sonic launch. (ii) Migration to Sonic still has some uncertainties which hinders us from forming a complete time-line. We would like the first budget to be more flexible to account for any possible opportunity that arises and also to cover any irregularities in the normal operations caused by the migration and new deployment on Sonic.

1. BEETS to be Minted / Repurposed for the Upcoming Quarter

Discussion 1: We are proposing to mint a total of 5,000,000 BEETS to be used during the first quarter. Under the previously employed emission schedule an approximate of 4.35M BEETS would be minted during a 3 months period. Since it’s the first such budget, then we won’t have any BEETS to repurpose or put into use from the previous quarters’ buybacks. If the period of the first budget will be considerably lower than 3 months (see (i)), then it’s likely not all minted BEETS would be put into use and would be accounted under leftovers for the following budget.

2. BEETS Allocation for the Upcoming Quarter:

Discussion 2: From the 5,000,000 BEETS to be minted, we are proposing to use half (2,500,000) as farm incentives on Beets DEX and half (2,500,000) to be used under MD discretion. From the BEETS to be used for farm incentives, 1,000,000 BEETS would be used to incentivize the maBEETS pool and 1,500,000 BEETS to be distributed based on gauge votes. For comparison, the corresponding numbers under the old emission system for a 3 month period would be ~1.27M BEETS to maBEETS pool and ~1.9M BEETS to gauge vote farm.

The first quarter would have a substantial amount of BEETS to be distributed through MD discretion and we expect to propose a lower number here for the next budgets. This is to cover irregularities and new opportunities that come from the migration and new deployment (see (ii)). The possible use cases for the BEETS to be distributed through MD discretion include (but are not limited to): (a) Covering the early emissions of the DEX before gauge vote based emissions go live; (b) Adding extra incentives to specific pools on BEETS DEX that are deemed important; (c) Increasing the amount of BEETS to be distributed based on gauge vote; (d) Incentivizing the adoption and usage of Sonic LST on Sonic ecosystem.

At least for the first budget, we feel it’s best to use all the minted BEETS to gain a significant foothold on Sonic and thus propose to not use any of the minted tokens to increase the BEETS amount in treasury. Additionally to keep flexibility high, any possible incentives to Sonic LST would be coming from the MD discretion.

3. Protocol Revenue Allocation

Discussion 3: Here are the various sources of the protocol revenue and their distribution between different use cases. Compared to the current protocol revenue distribution on Fantom DEX (where 70% goes to treasury and 30% to maBEETS bounties), we propose to swap these for Sonic DEX, so the DEX itself would be the main flywheel for the protocol bounties deposited for gauge votes. For Optimism DEX we propose to use the 17.5% for DAO treasury (with the other 17.5% going to Balancer and 65% used for fee recycling for Optimism bounties). To increase the adoption and exposure of Sonic LST we would like to keep a similar system to the current sFTMx Coalition, but decrease the incentive amount from the current 50% to the new 20%, with the rest being split evenly between treasury and BEETS buybacks. Any other protocol revenue source (Fantom DEX fees, Sonic validator fees, Sonic fee monetization) would also be split equally between treasury and BEETS buybacks.