A lot of text with nothing said.
Your only counter point is we can’t do this because of inflation and dilution which is a weak argument and easily refuted.
TLDR; Beets should rework the proposal. Pull funds from elsewhere. I dont see how the proposal can move forward in its current form.
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If the dilution is your main concern, maybe we put it in perspective, what does 27M sonic really means?
Assuming this funds get burned and not used for airdrop “which will mean the same dilution as using this for this proposal and much more likely for them to hit the market as a sell order…”
With currently 1.3B sonic staked, and aprox reward of 4.5% yearly, just by staking, we get a yearly dilution of almost 60M… If you remember, FTM staking rewards were 15% apr some years ago, and many bigger tokens have way more than 4.5% apr
This 27M are not even half of the expected yearly dilution, it would be the same as having staking at 8% yearly for 6 months…
Do you really think this little “dilution” is not worthy for the kind of users it will help maintain which have been providing the base layer of liquidity for the network for probably years?
If you can’t see this… well… I would say that in current network situation, maintaining all this users it’s much more worthy than the very little dilution it would cause “assuming burning is the alternative”. I don’t think it is a bad idea to dilute a token if that way it gets some more traction, if things goes as planned, at some point, if adoptions is big enough, the token will become deflationary when more fees are burn than incoming staking rewards, but until that point, I really think a chain like this in current situation can afford a less than 1% dilution for keep an important portion of pretty essential users.
Also, notice the price impact the insta sell of 27M had in price… was almost nothing… of course this can have more effect if sonic goes to 5$, but probably the price rise goes by the hand with a liquidity rise. For example, taking a very quick look at coingecko and not verifying, ETH has a daily volume equivalent to 2.5% of it’s supply, here we are talking about a 0.72% of supply… pretty easy to absorb in a day by the market without harming the price if that’s your biggest concern.
And with this I’m not saying it’s okay to dilute after any hack, but that we should consider specifically for this hack, and not consider the outcome as a precedent because that is just absurd and that is why there is a voting.As I said in other comment, we are not creating any jurisprudence in here, just a resolution for a very specific situation.
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We’ve been building DeFi on Sonic because we believed in its long-term vision and wanted to be part of that story.
I’ve already shared my view on the proposal itself, so I won’t repeat all of that here. This post is a request for clarity from Sonic Labs/the Foundation, given how big and precedent-setting this decision is. I believe it’s reasonable for builders, LPs, and token holders to ask Sonic Labs for a more explicit position. Concretely, I’d love clear answers to:
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Where is the official venue for governance? Where should we expect official statements from Sonic Labs? Is it “X” or Discourse?
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After community feedback, what’s Sonic Labs ’ current thinking on the subject? There is only a public message on X saying Labs will abstain from voting, but does SonicLabs support this in principle? Abstaining without a rationale leaves a lot of room for confusion
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Was SonicLabs (or any Sonic team member) involved in ideation and drafting for this proposal?
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Does SonicLabs view making Beets LPs whole as more important than Multichain victims?
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If this passes, will there be guidelines for future hack allocations? Is this something SonicLabs will take responsibility for from here on?
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Is there any conflict-of-interest information the community should know? What is the % of impacted LP linked to Sonic Labs wallets, team wallets, investors, or close partners?
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Can we get clarity on the current thinking on the remaining airdrop funds, treasury management, and exploit policies?
My concern is the clarity of governance and precedent at the chain level. As a team building serious financial infrastructure, we need to understand the rules of the game: what the Foundation considers acceptable use of community capital and how similar cases will be treated in the future.
Given the time-sensitive nature of this vote, I’d appreciate a direct, consolidated response from Sonic Labs on this forum.
Rafael – Origin
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I don’t think you are after clarity of governance - the proposal is clear. You are upset because you personally lost multichain funds (many here did too) and want to have more crabs in the bucket.
Thanks to everyone who took the time to engage with the original post. Based on the discussion and follow-up conversations, we want to clarify how we’re approaching next steps.
First, on ownership and process. This idea was initiated and drafted by Beets. Sonic Labs’ involvement has been limited to guidance on governance mechanics; this is not a Labs-driven initiative. Nothing has moved to Snapshot, and nothing will without further discussion. The original post should be treated as a starting point, not a fixed proposal.
After discussion with Sonic Labs, a path has been identified to recover funds that remain frozen following the exploit. As a result, the airdrop-related amount under discussion has been reduced by 5,829,196.72 S, to 21,299,906.28 S
As outlined in the original post, the broader question we’re examining is how the remaining airdrop allocation should be used going forward. Instead of extending the airdrop through another season, our intent has been to assess whether a limited, non-inflationary structure could help restore stS liquidity by bringing impacted LPs as close to whole as reasonably possible, while remaining compatible with the network’s incentive structure and without introducing short-term sell pressure. This approach also reflects the reality that Beets cannot make users whole solely through protocol treasury or revenue, as doing so would materially constrain our ability to continue operating and supporting Sonic over the long term.
With that framing in mind, we’re keen to hear where the community sees this approach breaking down, or whether alternative structures would better serve the network.
We’ll review the input shared here before deciding whether to refine the idea further or step away from it entirely, and we’ll communicate clearly either way.
Thanks again to everyone who engaged thoughtfully.
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We’ve also shared an update on X: https://x.com/beets_fi/status/1998334354372841903?s=20
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How long would it take for Beets to repay the S based on using revenue?
2 years? More? Might be interested to lean about how many years it would take based on different revenue percentages. What does Beets earn per year in revenue? Not sure many people know
In the spirit of trying to find a path forward that appeases everyone I would like to suggest an alternative structure. A structure that minimises the Airdrop reallocation as much as practically possible. Appreciate this is not likely to appease everyone given the strength of the for and against arguments positioned to date.
This involves the frozen S to be recovered, Beets treasury to buyback and distribute S to affected LPs and a loan from Sonic Labs to be paid back via direct revenue share agreement between Sonic Labs and Beets.
I believe Beets have an S2 gems allocation that could be utilised too but I don’t know the amount.
Indicative structure as follows:
| S | % of Total | |
|---|---|---|
| S Recovered | 5,829,196.72 | 21.49% |
| Beets Treasury | 5,425,820.60 | 20.00% |
| Sonic Labs Loan | 5,425,820.60 | 20.00% |
| Airdrop Reallocation | 10,448,265.08 | 38.51% |
Distribution structure as follows:
· S recovered & Beets treasury buyback → distributed to LPs without lockup
· Sonic Labs Loan & Airdrop reallocation → distributed to LPs as locked 2-year positions
% splits are all indicative except the S recovered. Treasury buyback and revenue share need to be at a level that does not hinder Beets ability to operate effectively and continue efforts to scale the eco. At the time of these calculations (1 S = $0.096), the S buyback from Beets and S loan from Sonic Labs would equate to $521k each.
The airdrop reallocation represents 11.34% of the remaining airdrop funds with 81,713,978.79 S remaining.
What’s in it for Sonic & Sonic Labs?
· Retention of >1500 impacted LPs
· Deep network stS/wS liquidity supporting LST flywheels
· Aave TVL, helping to keep Aave on Sonic
· Commitment from Beets to continue building on Sonic
To everyone affected as part of previous exploits such as Multichain, Polter, etc.
Ask yourself if a similar proposal was put in place to make you whole how would
you feel towards it?
Clearly exploits are incredibly damaging to a network, especially one already on life support. Fantom/Sonic has had more than it’s fair share of exploits, leaving behind a graveyard of victims and those who remain carry the scars. I understand the position of, “well we didn’t get anything so why should Beets?” I don’t disagree but how does that help anyone? If a battle-tested protocol is exploited, shouldn’t we, as a community, want to help those affected?
The longer-term fix is network guardrails which Sonic Labs are working on. To
directly quote Sonic Labs “We will begin exploring with validators, builders,
and the broader community whether Sonic should introduce a governed emergency
mechanism similar to those on other networks. If the community chooses to
proceed, it would require a validator-approved hard fork to implement. It would
include clear, transparent guidelines on how and when it could be used in
extreme situations.”
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For additional context and an interview with the BEETs team check out this video:
I didnt hear on GMSonic why the funds should come from the Airdrop allocation that made sense. Just because there are diminishing returns on the Airdrop incentive NOW doesnt mean it will be the same a year or two from now. Making Beets users whole should NOT be the priority of ecosystem growth funds. Go ask for a grant instead.
Makes zero sense to set the standard that we protocols that are exploited can put up a governance proposal to get S subsidies.
Labs should have a position on this because it is setting a precedent. They are on the hook for the bill if it passes.
Per Daniel: base case is that Beets survives without this passing.
Fair question. To give some context, earlier in the year combined DEX + stS revenue averaged around ~$96k/month, but recent months have been significantly lower with last month at ~$23.4k due to market conditions. At current levels, even allocating a large share of revenue would take many years to cover a multi-million S amount, which is why we’ve proposed a bounded approach (10% revenue + 10% treasury) that we know we can sustain without compromising operations.
Appreciate you putting time into an alternative structure. The main constraint for us with a loan or a much larger treasury buyback is sustainability. At current revenue levels, taking on multi-year obligations of that size would materially impact our ability to operate and continue building on Sonic. That’s why the proposal has been framed around what we believe is realistically sustainable for the Beets DAO to consider, while still restoring stS liquidity in a way that is stable, non-inflationary, and supportive of the network over the long term.
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I totally get it. It might be worth considering using the 10% treasury allocation to acquire S and reduce the amount requested from the airdrop fund. My by rough calcs this would result in a reduction of 1,777,777.78 S (@ $0.09 per S).
This reduces the ask from the originally requested 27,129,103 S down to 19,522,128.50 S. ~21% of the airdrop funds with 72,640,115.37 S remaining.
++ the 10% revenue allocation could either be used to burn S (deflationary) or used to acquire S and put back into the ecosystem fund.
Thanks to everyone who took the time to engage with the proposal and the follow-up discussion. As stated earlier, this post was intended as an exploratory starting point rather than a fixed proposal.
After reviewing the feedback and reflecting on the discussion, it became clear that there wasn’t sufficient alignment to move this forward responsibly. With more clarity now from Sonic Labs on how the remaining airdrop allocation is intended to be used, it’s also clear that this proposal no longer aligns with that direction. Rather than push this into a formal process without that alignment, we think it’s better to step back, as doing so better serves both the Sonic ecosystem and the Beets DAO.
We want to be clear that this decision doesn’t change our commitment to Sonic or to the LPs impacted by the Balancer V2 incident. We’ve been open about the constraints we’re operating under and will continue to act responsibly within those bounds, while focusing on maintaining and strengthening the core infrastructure we operate on Sonic.
We appreciate the feedback shared, even where views differed. For now, we’re stepping back from this proposal and will continue engaging constructively with the community as we focus on moving the ecosystem forward.
This looks to be a unilateral decision by Sonic Labs, based on the “Transparency Update on Sonic Labs Airdrop Economics” posted on x on Dec 23, 2025.
The blog post stated: “To be clear, there will be no additional airdrop minting and the remaining tokens will be used for either airdrop, incentives, or burn”.
I’m sure the opposition to this will be rejoicing, meanwhile the victims of this exploit are left with no credible recovery plan. Evidently there were a number of for and against arguments, some of which from people who do not even hold any S or have any vested interest in the network or ecosystem. So we have outsiders with no voting power influencing recovery efforts for victims. This is why it should at least go to vote. Or if Sonic Labs want to pull the proposal from governance, they should support in providing an alternate resolution.
I’m not suggesting Sonic Labs pay the loss of out pocket in full as that sets an unsustainable precedent for any future exploits but considering the following, there should be a contribution to the recovery fund.
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The oversight on the freeze attempt allowing the exploiter to use permit2 to transfer and sell all frozen sts.
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21% of S was frozen, this could have been much higher if they waited for the attacker to sell their sts and then perform the freeze (hindsight is 20/20 absolutely - but permit2 on sts would’ve been known prior to executing the freeze?)
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The freeze on the exploiters wallets provided a false safety net which effectively closed the window for a soft/hard fork as performed by other Alt L1s (Gnosis Chain and Berachain) which allowed the victims on those chains to be made whole.
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S2 gem allocations were cut significantly short. If Beets received a similar amount to S1, this could be repurposed and make a significant inroad to the recovery efforts.
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$2m spent on multichain recovery. At current $S prices this almost matches exactly the loss value here (net of frozen recovered $S). Sonic Labs may have a vested interest in Multichain recovery if they personally lost $ but the Multichain update suggests this is for the community: “We stand with our community. We always have, always will.” So how are Sonic Labs supporting its largest community who have been affected by this exploit?
Considering the above, Sonic Labs should be committing some $S here to support recovery. There are many ways to do this, i.e. increase S2 gems allocation to match S1, provide a grant, provide a 1:1 match on contributions from Beets treasury dedicated to the recovery fund, etc.
It is not right to pull the proposal with no credible alternative for victims to be made whole. If this progresses to vote and fails, fair enough. That is governance.
I agree with this, it would be so easy to fix specially at this prices, if S labs have the big treasury they said, just spending 2M$ or 3 or 4M to buy S from the market and make affected people whole. Just make a loan without collateral to beets which have been a trusted dapp for many years and beets will pay back that loan in $ after some years if S prices is expected to go up, that is no problem. If S prices go to 0, then is no problem, there won’t be foundation anymore… and if project sucess, everybody happy and debt paid in months.
I’m personally quite done supplying liquidity in anything which is expected to be low risk and low rewards, doesn’t make sense to risk thousands to get few hundreds after years and have the chance to lose everything at any moment. I understand it’s defi, but it’s not the same to supply base liquidity in aave or time proven pools than to ape around in any new alpha… If ecosystem doesn’t care about this, well… bad future for ecosystem. Let’s see who is brave enough to risk hundred of thousands for a 2% yearly reward when there is no backup at all in case of disaster “specially when it’s such little price to pay right now”
In the other hand, we all know in any decentralized network nowadays everybody knows the outcome of the proposals before the proposals are submitted, so if it was revoked before pushing, well, it means it won’t go forward, see for example the other proposal of the validator which had lost millions of S for a stupid UI bug and no one stands to help him when it would mean no losses for anyone… ridiculous. Seems not many people care for things that don’t affect directly to their pocket, it’s quite easy to look somewhere else until it’s your turn.