Here is one possible r-phi encoding scheme that allows us to change the granularity of r smoothly between 0 and 3 bits.

1. The azimuth is always encoded with 3 bits.

2. If we read out r with only one bit, then we could distinguish between the cells {0,1,2,3} and {4,5,6,7}. With two bits, we can resolve {0,1}, {2,3}, {4,5}, and {6,7}. With three bits, all cells 0-7 are encoded.

Pro: this scheme allows us to decide on the bit width for the radial component separately from the azimuthal component.

Cons: four corner cells are left unencoded.