BeethovenX

Proposal

This proposal seeks DAO approval to introduce a new pool type — Dynamic ECLPs (Elliptic Concentrated Liquidity Pools) — into the Beets protocol. These pools, developed by Gyroscope Protocol, offer fungible concentrated liquidity with dynamic range adjustment.

As part of this proposal, the DAO will approve a revenue share model with Gyroscope that enables Beets to adopt this pool type. The revenue share model enables recycling 70% of the earned protocol fees back into the pool, like other pools on Beets, with the remaining 30% split equally between Gyroscope and Beets. This aligns incentives and supports continued development, integration, and growth of this innovative pool type.

## Motivation Concentrated liquidity pools have proven highly efficient in generating fees and trading volume by enabling tighter price ranges. However, existing ECLPs have a significant limitation: once liquidity goes out of range, LPs must migrate to a new pool that is in range. This creates friction, unnecessary costs, and often results in fragmented liquidity.

Dynamic ECLPs solve this problem by introducing adjustable price ranges, allowing LPs to keep their positions within an optimal range without needing to exit and re-enter new pools. This seamless adjustability means improved capital efficiency, fewer idle assets, and sustained fee generation for the protocol.

Importantly, this initiative also aligns with the Sonic Labs Season 2 Gems program, which will favor protocols that generate sustainable fees and value for the Sonic ecosystem. By integrating Dynamic ECLPs, Beets positions itself to benefit directly from this incentive framework.

Gyroscope’s implementation is fully compatible with Beets’ architecture, providing a smooth integration experience. By adopting Dynamic ECLPs, Beets can attract more liquidity providers who want the benefits of concentrated liquidity without the complexity of constant repositioning.

The proposed revenue share of 50% of protocol fees (post fee recycling) acknowledges Gyroscope’s development effort and Beets’s growth and BD efforts on Sonic and aligns incentives for the long-term success of this pool type. The proposal will allow Beets to deploy Dynamic ECLPs with a fee split of:

• 70% of protocol fees recycled back into the pool via protocol bounties.
• Of the remaining 30%:
  • 15% to Beets for BEETS buybacks (as per current Q3 budget, subject to change for future budgets).
  • 15% to Gyroscope’s treasury.

Specification

• Deploy support for Dynamic ECLPs
• Configure the fee mechanism such that:
  • 70% of fees continue to be recycled back into the pools as protocol bounties.
  • The remaining 30% is split equally, with 15% allocated to the Beets protocol and 15% to Gyroscope.
• The initial share for Gyroscope is fixed at 50% of the post-recycling protocol fees for Dynamic ECLPs only. Other pool types remain unaffected.
• The share may be revisited in a new BIP, subject to Gyroscope’s approval.

Impact / Risk Assessment

Benefits:

• Enhanced capital efficiency and lower churn for LPs.
• Higher trading volumes and fee generation for the protocol.
• Strengthened partnership with Gyroscope Protocol, benefiting from their continued innovation and support.

Risks:

• New smart contract integration always carries technical risk. Thorough audits and staged deployment are recommended.
• The revenue share model reduces the protocol’s retained fees for these pools by 50% (post-recycling) but is offset by the expectation of significantly higher volume and retention of liquidity.