Absolutely no one loses here except for mercenary airdrop farmers. And they just “win less”.
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As someone who farmed Season 1 and 2, who didnt sell their airdrop fNFT, and still has a lot of S, incorrect.
Yes, Airdrop funds have not provided growth and retention and that was the precise reason, Airdrop was reduced, seasons were cut. The funds remaining should be used judiciously and not for bailouts.
and, you know, literally every other S holder who has been diluted to hell already for ‘DAT‘, ‘ETF‘, and now ‘future burns from an exploited protocol‘ that all end up being promised but never delivered.
The flagrant disrespect for S holders’ ownership of the network has reached a breaking point. It’s bad enough tokenholders being told that they’re irrelevant, not valuable, and to ‘SAFO‘ - but being diluted for anything and everything, including other users’ investment decisions, is beyond a joke.
Should all S holders who weren’t in the pool be compensated with retroactive APR grants too to make sure everyone is on a level playing field now that we know stS-S is *risk free*?
Over 3 billion S decided to sit at a lower, if not zero, APR because they didn’t want to take the risk associated with this pool - now that we know it’s actually risk free, I’m sure they would all like to go back a few months and deposit too. I sure would like to!
The other element to this disapproval is: if this passes just because it’s a pivotal part of the Sonic ecosystem, then what’s to stop someone writing another proposal to mint 2 billion S to compensate the Multichain hack using exactly the same logic?
Before anything like this should pass, Sonic Labs needs to prove that the token is a priority and isn’t just an inflationary tool to patch over all their misgivings. Tokenholders have been patient enough without this spit in the face adding insult to injury.
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There’s no inflation as part of this proposal. It’s deflationary via commitment from Beets to market buy and burn $S.
Reallocated $S will be locked for 2 years and cannot be dumped like airdrop rewards.
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Whoops, commented to the wrong post.
No one said there was inflation.
It’s inflationary, with a reduction of that inflation should Beets be able to produce enough revenues. That’s not guaranteed, and given the trajectory of volumes, liquidity, and activity on Sonic it seems unlikely that 27m S is burned to offset the inflation.
If you’re so confident that Beets will produce enough fees to do so such that the proposal isn’t inflationary, then let’s just let Beets repay their LPs using protocol revenues…
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The full reimbursement actually makes good business sense from Sonic’s perspective. Net deflationary vs. airdrop via burns, bolsters critical Aave program, aligns your best infra dapp with your org. From the airdrop program, you are looking effectively at ~23M tokens, today worth 2.3 million dollars (Sonic swept additional ~4M which should eventually end back in LPs hands regardless of this proposal). So, additional restitution: Based on Beets treasury size (I think) 300K USD will be immediately turned into S and held (takes another 3M off the table).
So net 20M S that are directly from airdrop effort and assigned to affected LP that aren’t offset by Beets treasury buys OR initial sweep. Those $S won’t be liquid. That 20M S will be locked for 2 years, significantly bolstering the Aave program and making sure we don’t get delisted. Required. For Labs, especially institutional money. With an airdrop, that 20M is going to get sold. History shows us that. Bad for Labs. Finally, the burn. At current prices, Beets does slightly over 1M in revenue. That’s 1M S burned/year at 10% burn rate- far more if price drops since beets isn’t a 1 of 1 with $s price.
If price doesn’t drop, that’s because Sonic is doing well- and beets probably is too, since Sonic will benefit most from Beets’ growth- so revenue launching. Burn will be bigger in USD terms and support price. Airdrops didnt have burn provisions or have a mechanism to support price. Airdrops dont bring long term users, liquidity on dapps like Aave does. Passing this is better for the maximum supply AND for short term strategic prospects. You also, of course, ensure your best builders stay around and give them an even better incentive to help you win. Long term locking 27M $s, burning potentially millions more permanently, and securing Aave?
I vote yep.
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Too many ifs. Why doesn’t Beets pay more from protocol revenue? No S needed from the Airdrop fund.
Using MINTED S from the airdrop allocation means S that can’t be used for future incentive programs.
Big No. I’d rather Berts seek a grant from SL. No matter how you look at it the proposal seeks favoritism. Not a good precedent to set
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The idea of using a portion of the airdrop tokens for this proposed reallocation becomes more reasonable when you consider that ‘S’ and ‘STS’ were both categorized as core ‘whitelisted’ assets towards the airdrop, and the S/STS LP was one of the largest on the whole chain. While the whole situation is unfortunate and there are pros and cons going both ways, the proposal is an option that would would improve the odds of continued participation in the sonic community from those harmed by interacting with Sonic’s ‘core’ infrastructure and top-down campaigns such as airdrops.
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I Second these amendments to the original proposal.
If this were to pass, would prefer $3Mil from the treasury be allocated to the repurchase of $S due to the failed attempt of using the experimental safety mechanism “Fronzen.”
This would accomplish multiple objectives:
- Offset the Hackers Sell Pressure
- Remove liquid supply into a 2 year vested position
- Retain the Airdrop budget
- Fulfill ~1% of $400Mil in promised ETF Buy pressure
Thank you for your attention to this matter
What about Sonic Strategy?
the actual people who were affected in the stS/S pool are the real community members - the ones who still believed in the protocol after the 90% price drawdowns when all the airdrop farmers left. i do not understand the negative sentiment in the new proposal comments. why on earth would you not want to make your highest value community members whole for such a low cost ($2.7m at current prices)?
if this proposal gets rejected, this would be a historical mistake for the sonic chain.
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I farmed season 2, got absolutely nothing. Didn’t use stS. But now I’m supposed to approve allocating almost 5x the S given out in S2?
And vote to forego future airdrops to subsidize an exploit? That doesn’t make sense. Balancer should pay it not Sonic’s community.
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First things first, I feel for LPs who got hit. I’ve already been hit once by hacks, including the multichain hack on Fantom, which still hurts and is a horrible outcome.
That said, I strongly oppose this proposal – not because of Beets or Sonic Labs as teams, but because of what it says about Sonic’s governance and incentives.
- The remaining airdrop budget was sold as ecosystem/growth capital. Turning ~27M S into a retroactive bailout for one protocol is a completely different mandate. If this passes, it’s hard to argue Sonic is chain-neutral in how it allocates shared resources.
- This was a DEX / pool design level failure, not a base-layer Sonic failure. Socializing that at the chain level sends the message: “If infra breaks, governance might plug the hole with community funds.” That’s a terrible precedent.
I want to be transparent: If something like this passes, it’s very hard for us to keep taking Sonic seriously as a credibly neutral, predictable environment. In that scenario, we would consider winding down our products on Sonic and focus on more serious chains.
Nothing personal against the teams – but on the idea itself, I’m firmly against and would encourage a No vote.
I’d also ask those supporting this: why is this more important than the Multichain hack? Shouldn’t compensating those victims come first?
Rafael – Origin
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I think we can agree that if multichain situation would have been handled different and funds restored to affected users almost instantly Sonic current position would be really different right now.
Multichain was indeed quite similar to this, it was one of the foundations of defi in fantom, same happens with beets and sS “I think way smaller damage than multichain, but still a big blow”, and even if the hack is not related to the rest of pools in beets, confidence in the whole defi landscape in Sonic is damaged, even if it doesn’t make logical sense, but it’s a feeling most users will have. And in beets, specially in sS/ws pools, most of the users there were just long term users which are making barely any profit, the only real reason to have funds deposit there is to strengthen the network so other defi infrastructure can be built around. It’s not the same reimbursing a protocol like this than reimburse affected users from a new degen protocol with +100% apr, if we choose again to not take care of long time investors taking a minimum cut from the airdrop which will make no difference from the users which will receive the airdrop “as everyone have noticed, most of the comments about the airdrops are about why the airdrop is so small, and this applies for both seasons” then we only have multichain_v2 situation and things will continue to get slowly more and more cold…
Maybe you have a point about creating a precedent, but that’s why we have a vote, it doesn’t matter what happened before as long it’s voted each time “and yes, voting is very centralized in sonic and almost any chain… at the end will be in hands of the biggest validators to agree or not on this…”, there are circumstances and circumstances, and not all cases are the same, but both for this or for multichain, I think a vote to restore funds from the FTM/S foundation would have been nice. It’s not just restoring any small or high risk protocol, it’s about not losing/burning the current real believers which deposited in protocols like this to enable the foundations to have defi in the chain and allow many other new apps to have some base to work. Without sS/ws pool, what’s the point of sS? Any movement would be subject to 14 days of undelegation?
Maybe there are another options to get funds now, and rebuy S and cover the affected users, I would approve this approach given the damage to Sonic is minimal, the airdrop so far is not bringing any result I think, only hate, for some reason people always find a way to complain about anything that is made but then no one comes back with suggestions, just saying that “this is so bad but without suggesting any alternatives”.
But anyway, focusing in this proposal, for me it would be good enough, going against is just being selfish if you have not been affected, saying YES to this proposal gives you any disadvantage, you just help keeping the foundations of the network stable, the only drawback is less future airdrop which will go mainly to bigger players/farmers and leave almost nothing in sonic if it continues as until now.
This said, I can agree with some of your points and feelings and there should be better more fair options that doesn’t touch the protocol grow funds, and even if I can say YES to this proposal, I would leave a couple of ideas to make this more fair for the average user, but I assume a lot of options have been considered while beets and SL have been talking about the possible ways to move forwards… so if this is what we have been presented with probably have it’s reasons “and as always, would be really nice to know what have been talk about”…
-Instead of taking from airdrop funds, why not take a loan in $ from SL and their supposed huge treasury? Now S is at very low price, if it goes down 90%, probably nobody cares about the loan anymore because nobody will be using and if price goes up, it will be possible to pay the loan with beets organic fees. It’s more, this debt can be collateralized with beets associated validators “this way we have a set of validators working with beets and sS that are really into the future of beets and long term holders” this way SL treasury remains untouched backed by validators funds “in this case it can be a S nominated loan”
-Probably more difficult to be approved, but for example, I suffered a loss in here, probably higher than average user, I would be happy to approve a proposal where I just get back 50% or even 0% shortly and just get a very long term payback plan from beets revenue, but it’s essential to pay back all the “small-mid” investors which had in here like 80% of their S holdings as a safe way to hold S while helping the chain and without requiring almost any attention during bear market times. If all of this users are wiped, it will be very hard to recover them, for sure there won’t be attracted users like this ones with 27Ms from the airdrop
The thing with this proposals is that they will take longer time, are technically more complex, introduce new risks…
And this is in response to all the people to oppose to this proposal saying something like “everybody loses in defi, you take risk here, now you take what you deserve and lose same way as everyone else before you”
I’ve lost in many protocols many times, I measure my risks pretty well and I normally don’t complain, but as I said there are always cases, and currently, Sonic is not in a nice shape, and killing a lot of the remaining long term loyal users I think it’s a mistake… so even if this proposal is not accepted, this should be a place to discuss some other alternatives, not just to blame the teams “or basically call them stupid for making this proposal public without thinking in the integrity of the almighty defi ideals…” and start threatening with leaving the chain with your protocol if this goes forward. If you care about the chain, maybe you should come with some valuable input instead of just saying what it’s obvious… What happens, because you didn’t get compensated in the past nobody can get compensated in the future? That is why we are supposed to discuss it in a rational and practical way, if you have something to add, bring your ideas onto the table, or be clear if the only alternative from your viewpoint is to completely erase this users from sonic and maybe from crypto as a whole when there can be ways to avoid it without any personal damage to anyone.
And about compensating multichain victims, I agree, but as far as I know, SL have been paying for all the legal actions until now and it’s something in progress, it looks like it’s not exactly same kind of case, in that case, funds are located, some funds in exchanges, possible to recover some portion of them, I really hate it, but it’s how this absurd legal system works, so it’s something which is being worked on. In this balancer case, I don’t think something similar can be done given those assets are already cashed out and far away from reach.
So in summary, this proposal is good for me, it can be better, but it’s reasonable given it’s easy to implement, nobody incurs loses and instead of “maybe” bringing some more users, at least we keep a chunk of good ones and funds stay active in chain.
2 Likes
I am against the proposal.
Main reasons against:
- Decentralised apps shouldn’t be covered by the infrastructure provider, they are not insurance. This sets a precedence of future and retrospect hacks been compensated.
- If the airdrop “sucks” then SonicLabs should straight up burn the tokens, not create some weird precedence that will cause every other builder to feel sonic is against them. “Sorry team, you and your ideas are not important enough and you’re on your own, except these guys”. That’s a feel good moment for them right?
- While there are big whales and validators, governance proposals such as this should not be allowed by SL. It is too easy to manipulate for handouts.
Questions/suggestions
- 10% of beets revenue, how much is this? It doesn’t sound enough to cover 20-27 million S as it stands, if it was they’d already have the funds. I’d expect it to be more like 90-100% in the case of a bailout, if it is existential throw everything at it.
- How big is the beets treasury if they are offering 10% to cover, shouldn’t they use 100% of treasury and then use protocol revenue to build it backup or take a loan with a guaranteed payback amount per month from community/projects?
FF / SL have been working for years and have spent millions in legal fees on Multichain resolution. So that argument doesn’t hold here.
Airdrop funds are for the benefit of the community to grow and retain users. It is the core community that have been hit by this exploit and they need to be retained.
If a project wants to wind up operations because airdrop funds are partially reallocated (still 65M $S left in the fund) then that speaks volumes about empathy for the real community. Origin users were also impacted (albeit to a much lesser extent) and this is an opportunity for them to get made whole and you’d deny that? I would stop using anything Origin related out of principle with this stance.
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I believe people wouldn’t have such a negative reaction to this proposal if it was framed as less of a bailout and more of an investment. The 27 million S looks like a large number but at these depressed prices it’s ‘only’ 2.7 million dollars. Surely between the Sonic Labs and Beets treasuries, this amount could be scrounged up and used to buy S off the market? This would avoid the perception of tokens being thrown around haphazardly after being minted for a different use (The minting itself is a whole other story but this isn’t the place to get into it).
A USD denominated loan from Sonic Labs to cover the majority of the shortfall, repaid with a protocol revenue split (which should be far greater than 10% in my opinion) would look more like an investment into a key infrastructure partner rather than playing favorites and setting a bad precedent where losses are papered over with tokens and socialized, at a time when perception and sentiment are at rock bottom. It also wouldn’t require a fraught governance vote, being a treasury allocation decision.
Whatever the case, judging by the outspoken community response, I don’t believe this current proposal should be allowed on snapshot without a period of serious discussion, and most likely not at all in its current form. If the Beets team comes back with a reworked proposal or better yet applies directly for a loan from Sonic Labs, then there may be a solution that isn’t received this poorly by the community.
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Stop gaslighting people, it’s insane.
airdrop funds are now there to dilute 99% of other holders in order to bail me out. If you disagree and don’t vote for my bailout, you are in such violation of morality that I won’t ever use your product again.
Pathetic. Get a grip.
1 Like