BeethovenX

Summary

This proposal concerns the migration plan for BEETS token on Optimism, currently issued by the Multichain Bridge.

Background and Motivation

Since the joint Balancer and Beethoven X deployment on Optimism, BEETS token has been bridged to Optimism to be used for liquidity bootstrapping. The current BEETS token on Optimism is a bridged token issued by the Multichain bridge, deployed in May 2022. As the Multichain Bridge was hacked and has since ceased functioning, the BEETS token on Optimism can no longer be bridged back to Fantom, and has become effectively isolated. Currently, about 2.85M BEETS tokens are bridged to Optimism (which means that on Fantom, around 2.85M BEETS are stored inside anyBEETS, the multichain bridge contract). Among the 2.85M bridged BEETS, around 1.1M is currently held by Beethoven X treasury.

This proposal seeks to migrate the bridged BEETS token on Optimism, and resume the bridging functionality between the native BEETS token on Fantom and Optimism (possibly other chains as well).

New Bridge for BEETS

A new bridge has to be used to facilitate the transfer of BEETS between Fantom and Optimism. The proposal recommends using the OFT standard from Layer Zero to deploy a new bridged BEETS token on Optimism (l0BEETS in short). As an advantage of building on the OFT standard, Beethoven X admin maintains full control of the contracts, and is hence not vulnerable to the potential exploits that can come with third party bridging contracts or being exposed to a third party custodian. Since the OFT standard does not require liquidity for bridging, BEETS will be easily supported by Stargate to be bridged between Fantom and Optimism, and potentially other chains.

Migration of multiBEETS to l0BEETS

Since there are around 2.85M multiBEETS on Optimism, to make it possible for users to bridge those back to Fantom, a migration contract of multiBEETS to l0BEETS has to be deployed. For such a migration, native BEETS need to be bridged from Fantom to Optimism using the new bridge to supply l0BEETS on Optimism, and then users can swap multiBEETS to l0BEETS. The proposal asks the DAO Treasury to supply this amount for migration purposes.

Specification

This proposal seeks to migrate bridged BEETS token to Optimism, specifically:

1. Deploy Layer Zero bridged BEETS (l0BEETS) on Optimism.
2. Send 2.85M BEETS from Beethoven X Dao Treasury on Fantom to Optimism for migration.
3. Deploy contract and UI for migrating multiBEETS to l0BEETS on Optimism.

Risk Assessment

Each bridge comes with its own risk, as clearly indicated by the Multichain incidence. From talking with various bridge teams and other protocols, the Beethoven X DAO core contributors conclude that Layer Zero is a reasonable choice for the bridging solution.

There is the possibility that the 2.85M BEETS held by the multichain bridge contract on Fantom may be released by a malicious actor and thus enter circulation. The only way to mitigate the risk is to redeploy the BEETS token on Fantom all together, which, while possible, would mean a complete overhaul of the existing masterchef contract (since BEETS on Fantom is minted by masterchef) together with maBEETS. Given that 2.85M BEETS consists of less than 1% of the current total supply of BEETS, it is currently not worth the trouble to revamp the native BEETS token.

As the multichain bridged BEETS token is controlled by multichain, it is also possible that a malicious actor mints additional multiBEETS tokens on Optimism and potentially uses the migration contract to swap to l0BEETS. This risk is partially mitigated by the migration contract only supplying a limited amount of l0BEETS; moreover, Beethoven X contributors should try to make sure all multiBEETS holders on Optimism migrate as soon as possible after the migration is available. It is also recommended that the migration is made available only for a limited period of time to further reduce this risk.