Monthly Performance Report for May 2022

Ludwigs, near and far

Come gather closer, gather around the conductor’s podium, put down your instruments, and listen carefully. Once again, it is time to review the financial performance of May.

This report aims to define the metrics of success for Beethoven X in a fun, simple and easy to understand manner as well as offer insight and transparency to you, our users. Based on the presentation given during the Monthly Community Town Hall AMA this report is a way that users can stay up to date with the more quantitative aspects of the protocol.

This article will cover the following topics:

  • Highlights
  • Protocol Performance
  • Top Performing Pools
  • BEETS performance
  • Balances and Metrics

Highlights

May was another month where the entire industry saw some setbacks and turbulence carrying over from last month. However, Beethoven as a protocol has navigated the storm quite well. Highlights include:

  • Exceeded $1.3bn in Volume for the month
  • Swap Fees for the month was $1.4m
  • Protocol Fees for May amounted to over $153k
  • $46k to distributed to fBEETS holders during June
  • Bought $250k worth of BEETS on the open market
  • Added Financial Metrics

Protocol Performance

Our swap volume for the month was $1.3bn, a 17% increase from April, while swap fees for the month totalled $1.4m representing a a 19% increase from April

The increase in volumes and fees were primarily driven by the Luna collapse and impact on the wider industry together with the depegging of DEI.

While those two events sparked higher volumes and fees, they did however have negative impacts on TVL balances across the industry.

Having significant liquidity tied to UST, Luna and DEI (Beethoven had the highest DEI liquidity across all Dexs) meant that the events had a significant impact on our TVL. In total TVL decreased by $195m (66%) in the month, bringing our May closing balance to $100m.

Across the network we saw drops in TVL of greater than 50%

Top Performing Pools

Above we can see the ten liquidity pools account for a total of 77% of all the fees accrued by the platform and as a result represent pools that are particularly significant in terms of performance.

When taken in isolation, A Late Quartet brought in 23% of the swap fees for the protocol alone, other strong performers were Battle of the Bands and Fantom of the Opera.

All three top performing pools are a nod to the underlying pool architecture featured on Beethoven which provides flexibility through weighted pool composition.

These results show again just how beneficial volatility can be for both liquidity providers and the treasury.

BEETS Performance

Since March, the challenging market conditions have continued to impact the BEETS price. We opened the month at $0.207, went to a low of $0.0906 but had a small recovery to close the month at $0.136.

This price movement had a similar impact on our market cap and the graph shows that May was difficult for the market in general.

Balances and Metrics

At BeethovenX not only are we working towards producing monthly performance reports, we are also exploring the possibilities of implementing the equivalent of monthly financial statements.

April saw the introduction of a couple of metrics and a month end Balance Sheet, this month see introduction of a Flow of Funds statement.

Below you can see a breakdown of how swap fees were generated until the distribution as part of the monthly protocol fee distribution. We can also see the changes in the Treasury balance, but will do into more detail on that in the next part.

The table below looks at the treasury balances in more detail.

In general, the negative changes were driven by the wider downturn in the market, notable other events:

  • BEETS and USDC balances include the impact of BIP 20, where $250k USDC was used to buy back BEETS for Optimism incentives.

The four largest holdings at May month end were:

Looking at protocol TVL, we can see that the split as at the end of May is 47% in weighted pools, 31% in boosted pools and 22% in stable pools. Protocol owned liquidity became greater than 1% at month end.

The Last part of this report looks at our two revenue metrics: Revenue to Emissions Ratio and Revenue to TVL Ratio.

The revenue to emissions ratio takes the total swap fees divided by the total emissions directed to pools for that time period. This ratio looks to show the return generated per dollar of emissions.

Next, the Revenue to TVL Ratio takes the annualized swap fee and divides it by the average TVL during the period. This ratio shows the dollar amount generated per dollar of TVL.

When examining the ratios in the table below, weighted and stable pools benefitted under due to the market conditions driving volume and the decrease in the price of $BEETS.

Closing

May was an interesting month with increased volumes and fees, but a decrease in TVL.

June sees the launch on Optimism and we look forward to seeing what both networks can offer.

Thank you

Not Financial Advice
Investors should remember that the value of $BEETS, $fBEETS and the income from them, can go down as well as up and that past performance is not a guarantee of future returns. You may not recover what you invest.

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