BEETS

The BEETS token is the cornerstone of the Beets ecosystem, governing the entire tech stack, including the DEX, LST protocol, and validator set. Holders can participate in governance, shape protocol development, and earn a share of revenue generated across these components. By voting on which DEX liquidity pools receive BEETS incentives, users also influence BEETS liquidity distribution while being rewarded for participation.

Initial Supply and Tokenomics#

BEETS was originally launched with a planned maximum supply of 250,000,000. Of this maximum supply, 22% or 55,000,000 tokens were minted at launch as an initial supply and the remaining 195,000,000 were to be distributed using the MasterChef contract.

Quarterly Budgets#

Beets emissions are governed by a Quarterly Budget System, designed to provide a flexible and adaptive approach to BEETS distribution on the Sonic network. This system moves away from a fixed emission schedule, allowing governance to adjust emissions in response to market conditions while ensuring sustainable token supply and aligning with community interests.

Each quarter, the Music Director Committee prepares a proposed budget, which is then submitted for approval by Beets DAO. Once approved, the committee manages emissions within the set parameters. Any adjustments beyond their mandate require a community vote, ensuring transparency and decentralized decision-making.

How the Quarterly Budget System Works#

Under this system, the Music Directors present a BEETS budget for DAO approval every three months for the upcoming quarter. The budget outlines the number of BEETS to be minted and their allocation within the ecosystem. Future quarters also account for leftover BEETS from previous budgets and BEETS obtained through buybacks. Additionally, the budget sets the allocation of protocol revenue for the upcoming quarter.

Q1 2025 Beets Budget Overview#

BEETS Minted for Q1 2025: 5,000,000 BEETS were minted in Q1. This slightly exceeded the 4.35M BEETS that would have been minted under the previous emission schedule. Since this was the first quarter under the new budget system, there were no repurposed BEETS from previous buybacks. If the budget period had been significantly shorter than three months, unused BEETS would have rolled over into the next quarter.

BEETS Allocation:

• 2,500,000 BEETS were allocated as farm incentives on Beets DEX.
  • 1,000,000 BEETS for maBEETS pool incentives.
  • 1,500,000 BEETS distributed based on gauge votes.
• 2,500,000 BEETS were reserved for discretionary use by Music Directors to:
  • Cover early DEX emissions before gauge vote-based emissions activated.
  • Boost incentives for key liquidity pools.
  • Enhance BEETS distribution through gauge voting.
  • Encourage adoption of Sonic LST within the Sonic ecosystem.

Since the first budget cycle launched alongside Sonic, all newly minted BEETS were used for ecosystem growth rather than treasury accumulation. Future budgets may allocate portions of newly minted BEETS to treasury reserves.

Protocol Revenue Allocation#

Beets protocol generates revenue from multiple sources, including swap fees, yield-bearing fees, and flash loan fees. The new budget system enables an optimized allocation of these funds across different networks.

For Sonic DEX, the revenue split was adjusted to:

• 70% allocated to maBEETS holders in the form of BEETS buybacks.
• 30% directed to the DAO treasury.

For Optimism DEX:

• 17.5% went to the DAO treasury.
• 17.5% was directed to Balancer.
• 65% was used for fee recycling to optimize Optimism bounties.

For Beets Stakes S:

• 40% allocated to the DAO treasury.
• 40% used for BEETS buybacks.
• 20% allocated to stS Seasons.

All other revenue sources—such as Fantom DEX fees, Sonic validator fees, and Sonic fee monetization—were equally divided between the treasury and BEETS buybacks.

Advantages of the Beets Quarterly Budget System#

• Governance-Controlled Flexibility: Emissions can be adjusted dynamically to respond to changing market conditions, ensuring sustainability.
• Efficient Resource Allocation: The DAO can strategically allocate BEETS incentives where they are most impactful, maximizing protocol growth.
• Adaptive to Market and Network Needs: The budget system allows for adjustments based on migration timelines, adoption rates, and ecosystem priorities.
• Optimized Revenue Distribution: By shifting allocations based on network-specific conditions, Beets ensures sustainable growth across Sonic, Optimism, and Fantom.
• Transparent and Decentralized Decision-Making: All budget proposals are subject to DAO approval, maintaining alignment with community interests.

The Beets Quarterly Budget System provides the necessary structure to balance sustainable emissions, incentivization, and treasury management while maintaining adaptability in a rapidly evolving DeFi landscape.