BeethovenX

Motivation: In the very recent snapshot vote on treasury investment, the Symphony No. X BEETS 80 / USDC 20 pool ends up the 2nd highest option. https://snapshot.org/#/beets.eth/proposal/0xf2a38141322c4141ff474c25a68e67db158e37aacc2d698bc06a03edeee35c87

However, as the pool was established in the early days of the protocol. It has certain drawbacks that make it not favorable to be used as protocol-owned-liquidity. In particular, the pool has a fixed swap fee. It is better to optimize the liquidity before treasury investment.

Accordingly, the liquidity committee proposes to revise the investment options into one of following pools.

Option 1: fBEETS - USDC 50 / 50 pool with dynamic swapping fee (initially set at 5%) Option 2: BEETS - USDC 50 / 50 pool with dynamic swapping fee (initially set at 5%) Option 3: fBEETS - USDC 80 / 20 pool with dynamic swapping fee (initially set at 2%) Option 4: a new BEETS - USDC 80 / 20 pool with dynamic swapping fee (initially set at 2%)

The design of a 50 / 50 pool with 5% swapping fee is for the purpose of volatility farming, since the treasury will not stake its liquidity in BeethovenX farms, the liquidity is better designed to benefit from volatility of BEETS price. Such pool is another unique strategy enabled by Balancer tech, one could learn more about volatility farming in https://medium.com/balancer-protocol/case-study-harvesting-volatility-with-a-50-50-balancer-pool-5a6fdb8f2e41

Using fBEETS-USDC (compared with BEETS-USDC) has the following pros and cons Pros:

1. Using fBEETS to pair with USDC would enable treasury to hold more BEETS-FTM liquidity (underlying fBEETS);
2. It offers direct trading liquidity for fBEETS;
3. It might offer exciting strategy for BeethovenX to utilize the upcoming Solidswap (the plan is not finalized yet)

Cons:

1. fBEETS will likely have less trading volume compared with BEETS, thus the fBEETS-USDC pair would earn less from trading fees for the treasury;
2. It consists effectively less BEETS in the liquidity (since fBEETS only has 80% BEETS in it)

Also note that treasury holding fBEETS will take a portion of the protocol revenue share going to fBEETS holders (though the amount is negligible).

25% of the treasury part of protocol revenue will be used to buy back BEETS and provide liquidity according to the winning option.

Regardless of the outcome, the treasury will build up protocol-owned-liquidity for BEETS, this will benefit the protocol in the long run. It will also set an example of how flexible liquidity can be managed on BeethovenX.