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Last updated: Aug 14, 2023
Beethoven X is an investment platform built on Balancer V2, aiming to be the first next-generation AMM protocol on Fantom. The project has weighted investment pools, stable pools, trades, and LP tokens farms, and allows its users to earn protocol fees by providing liquidity.
The platform utilizes Balancer’s novel concept of an index fund, where instead of users paying fees to portfolio managers to rebalance their portfolios, they collect fees from traders who rebalance their portfolios by following arbitrage opportunities.
The company has also released a couple of NFT collections, called Ludwig NFTs. The first of these was airdropped to the community as a way of thanking the early liquidity providers.
Weighted pools which the platform utilizes are a generalization of the standard AMM product popularized by Uniswap. Up to eight different tokens can be contained in a pool with each of them having its own weight assigned, which defines what fraction of the pool is made up by each asset. With the change in the price of the tokens, traders and arbitrageurs rebalance it by making swaps, which maintain the desired weighting of the value of each token, while collecting trading fees.
In the case of stablecoins or synthetic assets, which are expected to consistently trade at near parity, the platform utilizes a more efficient design to allow for larger trades of these assets before having a significant price impact. The model on which the design of the Stable Pools is created is StableSwap’s AMM, popularized by Curve Finance.
There are also Liquidity Bootstrapping Pools (LBP) which are intended to be useful for launching tokens and swapping large amounts over time. These pools have weight shifting mechanisms implemented to keep high start prices with continuously changing sell pressure. In an LBP the launch token and the collateral token weighting within the pool are designed to change their ratio to ensure the price decrease and the amplification of the starting capital. This functionality is based on the smart contracts created by Balancer.
Through the project, liquidity providers can earn yield as well as stake their LP tokens in the appropriate farms to earn additional BEETS liquidity mining incentives. On Beethoven X self-balancing index funds can be created, instead of paying a portfolio manager to continuously rebalance the funds, liquidity providers collect fees as traders rebalance the pools, which is in their best interest because it allows them to take advantage of arbitrage opportunities.
Recently, Beethoven X added Boosted Pools to their platform, which is meant to set the standard for capital efficiency when it comes to providing liquidity. Through these pools, trades can be made between tokens while the pool’s liquidity can be used elsewhere at the same time to optimize the yield earning potential. Since in most cases less than 10% of the liquidity deposited into liquidity pools is being used to facilitate trades at any given time, the rest is necessary to facilitate large trades with low slippage. However, with Boosted Pools, the idle liquidity can be deposited into another platform and put to work.
To use the Beethoven X app, users need to first connect their wallets to the platform. Beethoven X wallet support includes MetaMask, Coinbase, and other crypto wallets. Beethoven X fees include trading fees denominated in the input token when executing a trade. 50% of them get re-invested into providing liquidity on Beethoven X and are controlled by the DAO treasury, 30% are used to buy BEETS off the market and distribute to liquidity providers, and 18% goes to the team in order to cover salaries and any possible infrastructure costs, the remaining 2% are allocated towards the Beethoven Climate Fund.
BEETS is the governing token of the Beethoven X project and is used in voting for decisions such as treasury expenditure, collaborations, liquidity mining, and others. The total supply of the token is capped at 250,000,000 with 68% of it allocated towards farming emissions, 13% will be vested and go to the team, 10% are left to the treasury of the platform, and 7% will be used towards strategic partnerships, and 2% were used for liquidity bootstrapping pool. The initial supply is 22% of the total supply and includes the funds for the liquidity bootstrapping pool, the vested team portion, and the fund allocated towards creating and maintaining strategic partnerships.
The team decided to enlist two well-known community members to serve as two of the three signers of the Strategic Partnership Fund wallet to reinforce a promise to never use any of these funds to pay or reward any of the employees of the company. One of the chosen people is Justin Bebis – one of the first developers on Fantom and currently providing technical and business guidance to many projects on the network. Bebis is also well known for his Reaper.Farm project. The other of the two community members tasked with serving as signers for the wallet is Solarcurve – a community contributor at Balancer for over a year, responsible for the creation of https://pools.vision/ and currently working towards growing engagement with discord AMA’s and the weekly newsletter. He is also signing seen.haus and Balancer’s multisig.
The treasury funds are controlled by the community, through three out of four multisig wallets controlled by one Beethoven X team member and three well-known community members – Austin (FTM Alerts), Mike B (Baller), and 0xWives (Community Moderator).
The platform utilizes MasterChef for minting and distributing their BEETS tokens following an emission schedule. The MasterChef mints and sets the amount of BEETS per block, 12.8% of which are minted directly to the treasury multisig wallet, and the rest are distributed to all farms according to their weight.
Beethoven X is incentivizing 80/20 BEETS pools with farming rewards to promote deep liquidity for their token, while LPs are exposed to minimal Impermanent Loss. In the “near future”, 30% of all protocol fees are to be distributed to liquidity stakers in the 80/20 BEETS/FTM pool.
Since the beginning of January 2022, fBEETS (staked BEETS) holders can participate in a bi-weekly gauge vote tasked to determine 30% of the BEETS incentives for pools, the remaining 70% of the emission is distributed as base farm weights.
The Beethoven X team has decided to retain their anonymity, and claims to have “more than 80 years of combined experience in building technology that matters”. With past experience in the financial sector and diverse backgrounds from NGOs to Farmers, the team shares a deep passion for the blockchain movement and cryptocurrencies.
All smart contracts used by the platform are immutable and not upgradeable since they are essentially Balancer V2’s contracts forked on Fantom Opera – the team claims that there is no need for a Beethoven X audit, as Balancer’s audits are fully relevant.
Besides partnering with prominent members from the Fantom developers community in the Beethoven’s Strategic Partnerships Fund’s multisig, the company has so far established collaborations with QiDAO, Olympus Pro, and Balancer Intern who besides working as an intern at Balancer DAO is also the man behind LBPLaunches.
The partnership with QIDAO and their MAI stablecoin enables Beethoven X to serve as the source of liquidity for MAI on Fantom. The project launched a USDC/MAI stable pool in October and plans to explore different pool constructions with MAI as its TVL grows. The OlympusPro collaboration aims to provide DAO treasury-owned liquidity and was approved by a community vote in January 2022.
The OlympusPro service, provided by OlympusDAO is meant to be used by partnering protocols to buy their own liquidity. Instead of staking LP tokens to farm rewards, users can exchange them for a protocol’s governance token at a discounted rate through a process.
The company is working on developing MetaStable Pools, which can be seen as a generalization of stable pools containing tokens with known exchange rates. The algorithms employed here are similar to those of stable pools, yet they can also be used to facilitate swaps between tokens with gradually shifting prices.
The team is developing a Co2 Capturing Strategy in order to reduce the carbon imprint. The program includes a periodical calculation of Beethoven X’s Co2 emissions and plans to capture an equivalent amount of it. The climate fund has 2% of the team shares of the protocol fees added to it, to make it possible to participate in natural and technology-driven solutions to the pollution problem.
Along with that, the team is working on a weekly performance report to be given to the community through AMAs. There are also discussions with “potential partners” to provide more utility to the Beethoven X NFTs.