[BIP-XXX] Burn the 10M BEETS held by the Balancer DAO on Sonic

Governance
1

TL;DR

The Balancer DAO holds 10,000,000 BEETS on Sonic, worth roughly $39k, under half a percent of the treasury. BIP-928 consolidates smaller and less liquid positions like this one before round one. We propose burning these BEETS instead of distributing or selling them. There is no contractual basis for this request; we are asking in good faith.

References

Background

In November 2021, Beethoven X proposed that “a portion of the Beethoven X protocol should be owned by both the BAL treasury and BAL holders.” It allocated 5% of BEETS supply to Balancer: 4% to the BAL treasury on a two year vest, and 1% to BAL holders who staked in a Beethoven X farm. In exchange, Balancer governance recognised Beethoven X as its approved Friendly Fork on Fantom. The proposal passed 481,735 to 6, and described itself as “the starting point of a long lasting collaborative relationship.”

The treasury allocation vested in full, was claimed under BIP-607 and bridged to Sonic under BIP-757. It sits in the Sonic DAO multisig at 0x4f22C2784Cbd2B24a172566491Ee73fee1A63c2e, a 6 of 11 Safe, and has not been put to use.

That exchange is complete. Balancer gave its recognition and the tokens vested as agreed. This proposal does not suggest otherwise.

Motivation

The position has to be dealt with during consolidation anyway. BIP-928 states that before round one, “the smaller and less liquid positions are consolidated so the claim is around six tokens rather than a dozen.” Ten million BEETS on Sonic is one of those positions.

Selling it would realise little. BEETS liquidity on Sonic is thin. In August, around $10,500 of buying moved the price by roughly 35%. Selling $39k of BEETS into that market would return a fraction of its nominal value, and distributing it in kind would leave each claimant with a sliver on a chain most of them do not use.

It is a very small part of what BAL holders receive. Under half a percent of a treasury of at least $9 million. Burning it barely changes any holder’s distribution.

It spares a partner that is still operating. Beets is not winding down. stS is now the only liquid staking token on Sonic, and Beets recently passed BIP-116 to cut emissions and buy BEETS back from the market. Ten million BEETS is nearly 4% of total supply and more than six months of current emissions.

It closes the relationship well. The 2021 allocation was meant to align two communities building on the same technology. With one of them winding down, burning the stake is a clean way to end that, and a small gesture of good faith from both sides.

Specification

  1. Transfer 10,000,000 BEETS from 0x4f22C2784Cbd2B24a172566491Ee73fee1A63c2e on Sonic to 0x000000000000000000000000000000000000dEaD.

  2. Executed by the signers of the Sonic DAO multisig, during asset consolidation and before the BIP-928 first redemption round.

The BEETS token contract (0x2D0E0814E62D80056181F5cd932274405966e4f0) has no burn function, so the tokens are sent to the dead address. They remain counted in total supply but can never be moved.

Risks and impact

  • BAL holders forgo roughly $39k of BEETS at nominal value, under half a percent of the treasury, with lower realisable value for the reasons above.

  • Technical risk is minimal. A single token transfer from an existing DAO wallet.

  • For BEETS holders, 10M BEETS are permanently removed from circulation.

In 2021 we wrote that Balancer was to Beethoven X what Mozart was to Beethoven: the original creator of a foundation to build on. That is still true. Thank you to the Balancer DAO and everyone who built it.