Beets DEX V3
Beets is a decentralized exchange on Sonic built around liquidity pools for liquid-staked tokens. It held about $395M at the 2026-08-14 survey. Its LP positions carry impermanent loss: even correlated staking-token pools accumulate the weaker token when exchange rates diverge. Beets uses Balancer v3 pool types, hooks and boosted liquidity. Those features add assumptions about each pool’s strategy and governance, but they do not remove inventory risk. This is an amm-lp class decision, not an individual rejection of Beets or a chain judgment on Sonic.
- Ships a product line without impermanent-loss exposure that merits its own review
Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.
The research file
The mechanism
Beets uses Balancer v3 on Sonic for weighted, stable and custom pools. LP shares are claims on changing pool reserves. Arbitrage restores the pool’s quoted relative prices by trading against those reserves. Boosted pools may place idle tokens into lending markets, adding lender and integration risk to swap fees and inventory exposure. Hooks and custom pools require a separate review of each pool.
Control and operating record
Balancer v3 provides the core Vault and programmable pool system, while Beets supplies the Sonic deployment, interface, incentives and governance layer. Anyone can create a pool, and some pools may allow changes to swap fees or use delegated managers. The Beets pool pages disclose those traits for each pool. This class result does not require a finding that the protocol lost funds, and this memo does not clear every pool or hook on its own.
The exit
Removing liquidity returns the position’s current mix of pool assets, subject to the exact pool rules, recovery mode and any boosted-asset unwind. A depegged LST or stable asset can dominate the reserves, while a one-sided exit may add price impact. Secondary incentives do not guarantee compensation for that loss or an immediate withdrawal.
Why the class rule decides
The amm-lp rule decides the result because two-sided inventory exposure remains the base payoff across Beets pool variants. This does not mean that Beets or Balancer v3 is unsafe in every case. A Beets product with principal that users can withdraw on its own and no AMM inventory exposure would merit a separate review.
Class rule
The amm lp class is outside the approved structures, so every protocol in it is not approved until the rule changes. The rule is about the structure, not an adverse finding about this protocol, and it is not a client instruction. The events that would reopen it are listed with the memo.
Sources
The claims above trace to these. Where a number could not be independently verified, the thesis says so.
- Beets — protocol and liquidity-provider risks · primary · accessed 2026-08-14
Supports: Balancer architecture, liquidity provision, Sonic deployment, protocol risks - Balancer v3 Documentation — core concepts and pool framework · primary · accessed 2026-08-14
Supports: core concepts, pool framework - Balancer white paper — weighted-pool invariant · primary · accessed 2026-08-14
Supports: weighted-pool invariant - Beets v3 pool disclosure — governance fee and recovery-mode example · primary · accessed 2026-08-14
Supports: pool governance fee, recovery mode, pool-specific controls
Inherited controls
The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.
| Chain | Verdict | Control | Control constraint |
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