[TEMP CHECK] Add stS to Aave v3 Sonic Instance

Governance New Asset
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[TEMP CHECK] Add stS to Aave v3 Sonic Instance

title: [TEMP CHECK] Add stS to Aave v3 Sonic Instance
author: @ACI
created: 2025-02-28

Summary

The proposal aims to onboard Beets’s stS, to Aave v3 Sonic instance.

Motivation

Launched in December 2024, Beets Staked Sonic (stS) is an ERC-20 Liquid Staked Token offering seamless exposure to Sonic network staking rewards via validator delegation, while remaining fully liquid in users’ wallets.

Similar to wstETH, stS passively accrues value—each time delegation rewards are added to the staking pool, the stS-to-S exchange rate increases automatically, with no action needed from holders. The underlying S delegation enhances Sonic’s decentralization across a diverse set of validators and strengthens the network’s economic security.

Previously known as sFTMx, the leading LST on Fantom Opera, stS quickly established itself as the kingmaker LST in the Sonic ecosystem, capturing over 12% of all staked S liquidity and 76% of S LST liquidity. Demand for leverage looping strategies using stS has been steadily rising, with over $160 million already deployed across other lending markets. Despite this strong demand for leveraged positions, stS has maintained a solid peg, currently trading at 99.72%.

Users can easily convert their S into stS via the Beets minting UI and redeem their stS with a 14-day unbonding period. Alternatively, they can trade stS directly on any of the following DEXs:

Current exchange rate as of 2/28/25: 1 stS = 1.0113 S

Security Considerations

Security is at the forefront of stS operations. Beets Staked Sonic was launched in December 2024, with its contracts originally audited by Spearbit, and then further audited by Trail of Bits in January. Beets maintains an Immunefi bug bounty of up to $200,000.

Regarding Oracles stS currently integrates a Redstone, Pyth, and Stork stS/S price feed, with a Api3 and Chainlink Oracle integration currently being worked on. Aave will use a CAPO oracle leveraging chainlink’s infrastructure.

Beets in numbers

Beets Staked Sonic has seen continuous growth since launching on December 16th 2024, with 138.65m S and $86.20m currently staked within the protocol.

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Beets Staked Sonic is growing at a steady rate and is currently the number one spot by TVL on Defillama for LST projects on Sonic, with over 3.4x as much TVL as the second largest protocol:

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Beets also runs a DEX on Sonic, resulting in it being the 2nd largest source of TVL across all protocols on Sonic:

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Points program

Due to both the underlying exposure to APR (currently ~5%), and the current Sonic points program which offers 4x passive points and 8x activity points on stS, S borrows vs stS have a seen continuous growth with users seeking efficient means to leverage capital.

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Being the largest LST on the network, stS is integrated into a variety of protocol verticals, including DEXs, Vaults, Yield Tokenization, and Lending markets:

Benefits of listing Beets Staked Sonic

Adding lending and borrowing support for stS on Aave would allow users to supply, borrow, and leverage Sonic’s flagship LST.

A dedicated stS market on Aave’s Sonic deployment would drive meaningful TVL growth and generate additional revenue for the Aave DAO through active S loans and liquidations. This integration would also position Aave as the go-to venue for risk-adjusted capital efficiency, enabling advanced looping strategies while providing exposure to Sonic points.

It’s worth noting that Beets also operates a DEX on Sonic, powered by Balancer technology. Beets contributors operate as technical Service Providers to the Balancer DAO and have played a key role in the development and deployment of 100% Boosted Pools, which have successfully re-hypothicated over $50M in liquidity to Aave.

With the launch of Aave on Sonic, Beets will deploy Aave Boosted Pools, creating a highly efficient mechanism for simultaneously growing Aave’s supply-side liquidity and strengthening Sonic Swap markets.

Alongside stablecoin liquidity such as USDC.e, scUSD and GHO, an stS | S Boosted Pool would likely see strong adoption from Sonic users—helping bootstrap supply while keeping borrowing costs low in leverage markets.

Proof of Liquidity (POL) and Deposit Commitments

As mentioned, Beets can deploy Aave Boosted Pools to help seed Aave’s capital markets on Sonic. While Beets would not directly supply stS or S POL to Aave, it would deposit POL from the DAO treasury into these pools, effectively routing 100% of capital straight to Aave.

Additionally, Beets is in discussions with Sonic Money Managers regarding the bootstrapping of the stS market through stS <> S looping strategies, as well as Boosted Pool POL deposits. Specific amounts will be determined in collaboration with the Aave team and the ACI, with further details to be shared during the ARFC stage of the proposal process.

Risk Parameters will be provided by Risk Services Providers at the earliest possible and ARFC will be updated with that feedback.

Useful links

Disclosure

The ACI is not directly affiliated with Beets and did not receive compensation for creation this proposal.

Next Steps

  1. If consensus is reached on this [TEMP CHECK], escalate this proposal to the Snapshot stage.
  2. If the Snapshot outcome is YAE, this proposal will be escalated to ARFC stage. Publish a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage.
  3. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal

Copyright

Copyright and related rights waived via CC0.

3 Likes
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It’d be good to know how much POL from the DAO treasury will be deposited into the Aave Boosted Pools on Sonic; a lot of other assets are asked to make liquidity / deposit commitments, so to judge apples to apples, this information would be valuable.

It’d also be good to understand the demand for leveraged looping of stS <> S, demand for S in general, and the revenue opportunity from adding this asset to the Sonic instance.

1 Like
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Hey Sid, as a core team member of Beets, I would be happy to answer your questions.

What is the demand for leveraged looping of stS <> S?

As an isolated S | stS market, the Silo market shared above gives a direct quantifiable example of the current looping demand. There is currently $86.7m in the stS market and $92.5m in the S market. The isolated market is currently at a 90% utilization rate for S borrows.

This is the largest lending market on Sonic, but there is stS supply and S borrow demand in every other market on Sonic, such as Euler.

Another example of the appetite for stS looping is this Stability Vault that currently leverage loops the Silo isolated market 17.4x. This vault hosts ~$20.3m TVL.

How much POL from the DAO treasury will be deposited?

As stated above, exact amounts are still in discussions but will be shared during the ARFC stage of the proposal process. It’s worth noting that all Aave Boosted Pool integrations will bootstrap liquidity across a range of Sonic markets, not just stS, and don’t rely explicitly on Beets DAO POL. For example, we have already seeded ~$24m in Boosted Pools on Sonic that direct liquidity to other lending markets, and we expect Aave to witness a much larger appetite from larger capital money markets. We are in talks with different MM’s and DAOs who are looking to access these markets, but again, exact funds are yet to be finalized and will be shared during the ARFC stage.

2 Likes
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The current proposal has been escalated to TEMP CHECK Snapshot.

Vote will start tomorrow, we encourage everyone to participate.

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After Snapshot monitoring, the current TEMP CHECK Snapshot ended recently, reaching out both Quorum and YAE as winning option with 824.1K votes.

Therefore [TEMP CHECK] Add stS to Aave v3 Sonic Instance has PASSED.

Next step will be the publication of an ARFC to continue gathering interest.
Closing thread to focus on ARFC.