SODAX Announcement Next Steps

Proposal Discussion WIP: BIP
#1

This post addresses ICON’s recent announcement of their next chapter as a vertically integrated cross-chain DeFi platform, SODAX. If you haven’t read their post, I’d recommend first doing that for the necessary context. See their post here

First things first, I love Balanced. Seeing my original vision for this product come to a reality and implement technical advancements far beyond my initial expectations has been incredible. With that said, I’m excited at the opportunity (2nd opportunity!) to fully merge forces with SODAX moving forward. Below I’ll break down the current opportunity with SODAX, my proposed next steps, and why.

Opportunity with SODAX

Affiliate Partners

One aspect of SODAX’s strategy is their Affiliates incentives. Front end applications, wallets, aggregators etc. can easily plug into SODAX’s liquidity and tack on a fee for their protocol. This is how Parrot9 can make the Balanced brand and product into something profitable and sustainable for their team. I can say for certain I plan to interact with SODAX liquidity/products through the Balanced interface I’ve come to know and love over the years.

This isn’t some brand new idea - it’s a business model existing DeFi protocols use as well. For example, using the Uniswap app comes with an additional 0.25% fee, on top of the 0.3% fee charged by the smart contract protocol itself. Fees like this are typically only avoidable if you trade using bots, directly with the contract, no frontend application.

Token Upgrade

SODAX is giving $BALN holders the opportunity to upgrade to $SODA with a variable lock-up - the longer you lock your $SODA, the more you receive:

  • No lockup = 0.5 SODA
  • 6 months = 0.75 SODA
  • 12 months = 1 SODA
  • 18 months = 1.25 SODA
  • 24 months = 1.5 SODA

You can read more about the SODA tokenomics in SODAX’s post, but I’m really liking them. Sustainably generated yield, deflationary from day 1, protocol-owned-liquidity centric and a hard capped token supply.

Proposed next steps

Imo, the best path forward for $BALN holders is to come together with SODAX under the $SODA token. That’s what I will be doing. In practice, I’m thinking we should take the following steps:

  1. Unlock $BALN from the bBALN contract - whenever the token upgrade to $SODA is live, we should do a vote to unlock bBALN so holders can migrate without the unlock penalty
  2. Migrate control of the governance contract - In the same vote as the first step, we should migrate control over the governance contract to a multi-signature wallet of trusted DAO members. This will prevent any sort of governance attack as people migrate tokens
  3. Shut off emissions - whenever the token upgrade is live, we should shut off BALN emissions to end inflation.
  4. DAO Funding Proposal for Parrot9 - I’d like to give Parrot9 a real chance to make the Balanced app a profitable and sustainable venture for their team. They’ve dedicated over 4 years of their career to this project. Uniswap and many other apps charge fees for using the frontend (in addition to the protocol fees) as a sustainable business strategy, and I think Parrot9 has the capability to do the same. The details of the proposal will come separately from Parrot9.

This is the best path forward for SODAX, Balanced and Parrot9. I don’t see a more sustainable and promising path forward for all stakeholders.

Final thoughts

Not only is it the best path forward, but it’s really the only path from what I can see. In reality, ICON has been supporting Balanced out of good will ever since the previous collaboration, and even before. Here’s the situation in practice:

  1. All the liquidity on the platform comes from ICON, without liquidity, we have no source of revenue
  2. All the funding for continued backend and smart contract development has been coming from ICON, even before the enshrinement
  3. All the funding for Parrot9 since enshrinement came from ICON’s purchase of BALN tokens from the DAO

This is not a sustainable path for either party, and it makes sense, now more than ever, to come together under one token.

I’ve been contributing to ICON since 2018, it’s been a long ride. I’m excited for this next chapter and can’t wait to see how this product, protocol and community continue to evolve - I’m in this for the long haul.

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Our vision for Balanced
#2

sICX will need to be unstaked I’m guessing for the 1:1 swap?

What about loans on Balanced?

My two main concerns, otherwise Im in agreeement that this is a good plan for Icon.

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#3

I’m expecting that sICX won’t need to be unstaked, but not sure if that’s been finalized.

Loans on Balanced will need to be migrated yourself over time, but it will be no cost to migrate afaik. I’m in a similar situation.

Not sure if @Andell has more specific details on that.

#4

Yeah sICX and ICX would probably be supported directly and we can unstake and burn it on behalf of the User.

We will make it as cheap as possible to migrate but might initally be some manual work to avoid complicated and dangerous automated migrations solutions.

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#5

I agree with everything except for one point. The BALN conversion should be at a 1:1 ratio for everyone. Offering a 1:1.5 rate for those who stake is a bonus and people can decide

1 Like
#6

Exciting times ahead! Lets go!

2 Likes
#7

Hi all,

I haven’t been as vocal lately, but that doesn’t mean I haven’t been paying attention — now, though, I have some questions about SODAX and what it means for us as users and holders.

⸻

1. ICX Utility vs. SODAX Utility: What Translates?

Historically, ICX served multiple purposes:
• Staking to support the ICON network and earn daily validator rewards.
• Converting to sICX to use as collateral to mint bnUSD, supply liquidity, or simply hold/trade while earning staking rewards.

As ICON transitions from a Layer 1 to a protocol on Sonic, and ICX is migrated 1:1 to SODAX, I’m wondering:
• Will SODAX have a staking mechanism?
The ICON post mentions 20% of protocol fees going to staked SODAX, but the method and mechanics are still unclear.
• Can SODAX be staked and also used as collateral or liquidity (like sICX)?
In other words, can it be productive in DeFi while also earning yield?
• Will staking SODAX come with governance rights?
Will it mirror the limited influence of staked ICX, or be more like bBALN with direct vote weight? Will there be additional layers of governance now that the validator / P-Rep model is being retired?

⸻

2. BALN / bBALN Use Cases and What Comes Next

BALN and bBALN had several specific utilities:
• Locking BALN to mint bBALN and earn protocol fees.
• Voting rights on emissions and governance proposals.
• Boosted incentives and bribes tied to liquidity pool votes.

Now that Balanced will no longer operate as its own protocol — and with SODAX shifting toward Protocol-Owned Liquidity (POL) — I’m wondering:
• What are the new benefits of holding SODAX?
• Will it include fee-sharing, governance, or access to features?
• Can SODAX be used as collateral?
BALN wasn’t previously eligible due to volatility and limited liquidity. Has this changed with the updated tokenomics?
• Are there incentives to hold (not just use) SODAX, similar to how people held BALN or ICX for yield, staking, or long-term prospects?

⸻

3. Transaction Costs and Working Capital

One underrated benefit of staking ICX was the steady trickle of rewards — always having enough for transaction fees. On Sonic:
• What is the native currency for transactions? (Sonic)
• Do dApp transactions (swaps, loans, etc.) auto-deduct fees and transaction costs from the assets involved (e.g., convert a bit of ETH to SODAX/SONIC for protocol fees and/or network fees)?
• Or will users need to manually hold a balance of SODAX or SONIC to cover transaction and network fees?

⸻

I really appreciate all the work that’s gone into this transition. I’m excited about what’s coming, but I’d like to better understand how the utility, rewards, and user experience are evolving — especially for those of us who’ve been actively using BALN, sICX, and ICX.

Thanks in advance :slight_smile:

1 Like
#8

Will SODAX have a staking mechanism?
Details will be cleared up soon as we finalize the staking logic

Can SODAX be staked and also used as collateral or liquidity (like sICX)?
Yes, that is the goal. But we first must complete process of exchange and oracle migrations for collateral. For liquidity we will do that as soon as the token goes live hopefully

Will staking SODAX come with governance rights?
This is still being worked out, we want the stakers to have voting weight similar to bBaln but hoping to do it in a more efficient way via delegates or something similar so we don’t have to deal with the same stagnation we have seen with bBaln holders.

What are the new benefits of holding SODAX?
For now mainly fee-sharing, governance. Then also we are considering things such as fee rebates etc.

Can SODAX be used as collateral?
As mentioned above this is the goal

Are there incentives to hold (not just use) SODAX, similar to how people held BALN or ICX for yield, staking, or long-term prospects?
Yes we are still going to both acquire more NOL and burn SODA tokens, while also paying fees to stakers. And that i guess would be longterm benefits.

What is the native currency for transactions? (Sonic)
This is Sonic S. And is neccearily not something we would care that much about. We are now instead having a App focus. Meaning the new dapp will have full usage on all chains. So you can have gas on the chain you feel most like you want to use.

Do dApp transactions (swaps, loans, etc.) auto-deduct fees and transaction costs from the assets involved (e.g., convert a bit of ETH to SODAX/SONIC for protocol fees and/or network fees)?
Yes pretty much, we are doing some difference in the way we are going to manage and handle fees on which we will have clearer outline in the coming weeks. But can be read about more on P9 post.

Or will users need to manually hold a balance of SODAX or SONIC to cover transaction and network fees?
Only need the gas for the chain you are on. No Sodax is needed for fees.

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#9

Thank you :clap:

Interesting times ahead. And some conceptual shifts.

1 Like
#10

My understanding is Balanced will play a major role in this new platform (SODAX), while $BALN tokens represent less than 2% of the entire supply of the new token (SODA) if the average lock per BALN is around 12 months. Even if everybody locks it for 24 months, we only represent around 2.6% of the entire supply.

This seems very unfair to me.

2 Likes
#11

Yes, since BALN value went down by 25% vs icx post announcement with the BALN Holders being the main supporters of ICON I propose

No lockup~ .75 Soda
12 month lockup- 1 Soda
24 Month lockup~ 1.75 Soda

Just need to be fair as the market displayed a 25 percent drop in BALN value with the current offer. Let’s make it equitable.

#12

Yes, since BALN value went down by 25% vs icx post announcement with the BALN Holders being the main supporters of ICON I propose

No lockup~ .75 Soda
12 month lockup- 1 Soda
24 Month lockup~ 1.75 Soda

Just need to be fair as the market displayed a 25 percent drop in BALN value with the current offer. Let’s make it equitable.
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#13

That’s still very unfair. They need to give us at least 5 times more than this to make this somewhat fair. 10% allocation to BALN holders still won’t be fair, but I think it will be doable.

1 Like
#14

I think that could be unreasonable asking for that much from ICON. I feel I’m being rationale, the market reacted with a little more than 25% backlash to BALN. That is why I’m asking for those numbers.

ICON probably has enough BBALN to pass anything they want though, so even if my vote of “no” doesn’t matter I think the ICON team initially thought the offer was fair to begin with to BALN holders, the market just thought otherwise so they should adjust their offer to be fair to BALN holders, All I can do is vote no to new proposals to let ICON know we would like new numbers closer to what I asked for to match how the market reacted to the BALN to SODA conversions.

#15

I don’t feel BBALN stakers have been stagnant when we averaged over 50% of BBALN voting each time. Probably much higher than the average DAO, but I don’t know that for certain.

#16

@BALNSupporter @brk34 @The_Kaiser

I understand the desire to maximize the BALN-to-SODA exchange, but it’s worth recognizing that this offer appears to be a generous extension of the original 1-token enshrinement proposal.

Any arguments based on BALN’s current market price—or its movement in response to migration news—can just as easily be made in reverse, referencing BALN’s pre-enshrinement value.

BALN-to-ICX Exchange Ratio - We propose ICON to purchase all circulating BALN at a fixed price of 0.5 ICX per BALN, a ~40% premium to the current trading price of BALN (as of January 11th, 2024).

1 Like
#17

I can see that argument, but in the present state that’s what happened to the BALN price. Which actually went down a lot more than 25% compared to ICX but I’m staying rationale here. I also think ICON was trying to be fair to BALN holders with their offer to SODA tokens but the market thought otherwise so we need to adjust it to what the market did, pre SODA announcement.

Just so I can be clear…

I’m not even saying for ICON to use my numbers, but to just adjust each offering up a few percentage points for the no lockup, 6 month lockup, 1 year lockup, and 2 year lockup.

#18

@BALNSupporter i have to agree with @AwaxJago - this ratio is the same one we got previously, plus the option to get up to triple the amount of tokens for locking up longer. It’s a great deal.

I don’t follow your logic. Yes, from the date of the announcement, there has been a ~25% drop in BALN/sICX ratio (0.599 sICX on May 5th morning to ~.44 sICX currently). Idk why you were saying the ratio went down a lot more than 25%, maybe we’re looking at different numbers? See screenshot below for where i got mine.

Screenshot 2025-05-16 at 11.56.32 AM
Screenshot 2025-05-16 at 11.56.32 AM1344×880 49.1 KB

Personally, i don’t find it that relevant. That’s more related to pricing the amount of time you’ll need to wait for migration. It will behave like an ICX Bond. For example, once dates are finalized and they are approaching, if BALN were to fall to 0.5 ICX per BALN, then as an ICX holder you’d get a 100% annual yield for swapping ICX → BALN.

What is much more relevant is what the value of BALN was pre-enshrinement. Given that this is the same offer, ICON has still added ~40%+ value to BALN. I don’t really understand the argument to increase the ratio, and nobody has shared any metrics that justify increasing the conversion ratio.

Things I’ve heard

1.) It’s not fair
2.) Market price went down after the announcement

Neither of those answer the question, why is BALN worth more than what you’re being offered? Here are the facts i’ve provided, reiterating again why this is a generous offer.

I am a large BALN holder, I don’t bite the hand that feeds me. This is super generous and I don’t really understand the logic of the people dissatisfied with this other than their hopes for higher price are not becoming a reality. Simply hoping and wishing does not make it so. This is clearly this best option forward, to align with a team that’s well funded and making genuine technological strides.

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#19

Price of BALN is totally irrelevant here. BALN has been listed on only one exchange, which is itself. So, it’s pretty normal that the price of the BALN is extremely low.

That is why a lot of us invested early and staked our tokens for years. We all were aware that BALN was extremely undervalued, which represented huge upside potential for long-term holders.

Like I mentioned before, Balanced will play a critical role as the core part of the new product, whereas less than 2% of the token supply was allocated to BALN token holders.

This is extremely unfair.

I’m speechless to see not just someone, but a founder passionately defends this and claims that this is a generous offer. I guess, we as the token holders had no value right from the beginning. That feels like a slap in the face.

#20

Balanced as a DAO does not play a critical role in SODAX. Parrot9, as a team, will be a good partner to SodaX. What critical role do u think the DAO is playing?

I will passionately defend what is best for the project I helped start. Dreams don’t pay salaries, revenue and success do. This is so clearly the best path forward. Not only did I get this opportunity once, I got it twice, and the second time at an even better deal.

The only reason I am using my time to address this uninformed, irrational post is for others that may be reading to understand the situation clearly.