Nomad Bera 🐻⛓️

Last night we did the very first Bera Breakdown special guest segment! The Bera, the myth, the legend @nomad_ joined me as we discussed all things POL and the potential of the future. This episode was a follow up episode to @The_HoneyCast episode he did earlier this week. We got some additional clarity on the topics and also got to see visual tools with pretty pictures for Beras that can't read! See below for the Breakdown of what was reviewed: 0:00 - 4:00 Intro 🎶 4:01 - 5:36 Bera Breakdown contest winner 5:37 - 6:10 Gracias for taking the time 6:11 - 8:30 Why are we here? 8:31 - 10:37 Why bother writing an article? *** 10:38 - 22:22 Inefficient Bribes/BGT Index*** *** 22:23 - 47:30 Incentive Marketplace/Guaranteed rewards showcased with pretty pictures*** *** 47:31 - 1:24:20 Introducing fee tiers also with pretty pictures. Berachain has to eat too right?*** ***1:24:21 - 1:50:43 Performance based inflation.*** ***1:50:44 - 1:58:05 Cross chain? Should we open up and play with others?*** 1:58:06 - 2:07:50 Why is this even important? We have the ability to be heard here on @berachain !! 2:07:51 - 2:09:55 👋🎶 Dashboards for the stuff we discussed are actively being created for us, the community, to play with by Nomad 👀. Coming Thoon! Jester briefly rugged me at the halfway mark for 2 min. He is always watching... Pardon the interruption. See you all in the next stream! In case you missed it: x.com/i/broadcasts/1… BeraBreakdown on Spotify: open.spotify.com/episode/1T4H2j… BeraBreakdown on Apple: Damn Jester is preventing... should be thoon

@berastotle Just left my comment. Also saw that you were understating the inflation post proposal slightly so I clarified it. Its gonna be around 5.12%

@nomad_ I'm the only person not on the team that commented lol. forum.berachain.com/t/proposal-dec…

@berastotle Yeah thats why I want more feedback to kind of group up an alternative

@nomad_ Based on prior experience, post by Bera labs seems to mean "already decided" I'm in favor of any proposal that pumps price :)

@berastotle Yeah I'm def gonna write something there. Just asked some people for feedback before I go in

@nomad_ Right, but >50% inflation cut is already happening - perhaps if you're against it you should engage in the forum? There's not much point to optimizing POL when the annual yield is 3.x%

@berastotle I'm in support of an inflation cut, but only if there's guidance of some sort of adaptive inflation model that could pull it back up in the future. Inflation cuts are permanent (people will never vote to pull it up again) so I wouldn't want to see that.

@nomad_ Gm, would you propose this as an alternative to the current proposal to cut inflation to 3.8% or do you think it will work with low inflation?

Agree on those points and I did try to reduce complexity, but haven't been able to find simple fixes to a lot of the issues I see so it ended up as a long thing again. I did propose some simple stuff like the BGT Index and simply pricing incentives with USD, which I think would go a long way in helping PoL. The goal overall was to explore alternative mechanics and potentially have some of them stick. Order of priorities makes sense. I believe what I proposed directly touches on most of that, but I admit its complex. Hope the diff perspective helps iterate on the current system

as you can prob guess, similar to one of the previous systems you've proposed, a large concern is just complexity. People already have a pretty hard time understanding PoL because there's two tokens and validators and all these words they aren't used to hearing - add in fee tiers, slightly arbitrary points multipliers and additional degrees of freedom and you're left with a tough problem to solve. A bigger thing we've found esp when chatting with external teams who aren't super crypto native (combined with current friendlier regulatory environment) is a lack of understanding of the utility or existence of BGT in a world where LSTs exist. The dynamic inflation design is v similar to something I've proposed in the past, which is nice to see as a validation of some of my own thoughts :) Cross chain is also a goal; but it'll depend a *lot* on nailing implementation. I'd want to see PoL working as intended within Bera prior to going out and boiling the ocean. As I see it, the order of priorities is more or less: 1) Make PoL attractive for net new teams that are strategically relevant to BERA. 2) Ensure the spend in PoL emissions is going to the right teams which drive strategic value. 3) Capture value from those teams, either via indirect effects or direct demand driven for BERA, HONEY etc 4) Scale it crosschain.

Thats true so a lot of what I shared here aims to bring that premium back. The whole proposal aligns Berachain and LST providers in increasing the premium to create better performance for both the chain and the protocol so they are in sync. I also tried to make bribes more compelling. Instead of bribing and hoping for the best, everyone knows exactly what they get from the start, and its always positive. If enough people are competing for what is essentially free money, you can definitely push clearing rates higher, and thats also why I want to reduce friction and invite other ecos to bid. If average bribe rate creeps up, yield increases overall, and it might make BERA/BGT more attractive, without any additional dilution since that yield comes from bribes. I think these value leaks in the current model prevent the premium from stabilizing/growing

@nomad_ Agree it works if BGT holds a premium consistently high enough tha bribes are greater than BERA price, but that hasn’t been true for a long time

Yeah here's how I'm thinking about it. The price ceiling would cap the rates at $0.90 per $1 of BGT, but with the initial fee it ends up being $0.95 per $1 of BGT without any tiers. We can use the BGT Index and apply the 3% premium, so we effectively have $1.03 of BGT. The protocol receives the $1, paying $0.95, and the $0.03 is not fully used. If premium were to expand, which is in Berachain's interest now, then that residual can grow as well. The end state of that BGT reflected on Berachain's valuation is 1 BERA, so the premium boosted the system, but ends up vanishing once BGT is realized. I agree its strange accounting, but from the end state of those emissions it can make sense.

@nomad_ This is a strange notion. You’re advocating for a bribe ceiling that ensures BGT emissions are always a value loss to BERA accounting, while also implying that it’s possible for bribes to cover the cost of inflation.

Expanding Berachain's TAM helps pay for BGT emissions, driving BGT price up, and helping cover inflation. Right now there's not enough money flowing in Bera to cover all inflation, so emissions are being wasted. By promoting competition you help push the system to a higher clearing rate and since native protocols have an economical advantage, in a long term horizon they still receive the majority of the benefit

@nomad_ I don’t see the benefit of emitting BGT to other chains without any offsetting benefit to berachain. The incentive fee isn’t sufficient, because it’s still net value leakage (1 BGT emitted in exchange for 33% of the incentive).

Berachain's average incentive rate is around 60%, so BGT is being sold at a heavy discount. Partially because the incentive market is tough to manage correctly, so it can end up in losses. The ceiling rate guarantees positive ROI when engaging, and the other elements help control how much benefit is provided

@nomad_ I think a bid ceiling is interesting in theory, but in practice it likely just pushes competition to private bribe markets to discern between vaults at the ceiling rate.

@fungiblehuman When you set a rate for incentives, you define the rate of Tokens per BGT, but this BGT is just priced as BERA. LSTs like iBGT have an additional premium which is not priced in the mechanism, so protocols gain extra performance without this being considered in the system.

@nomad_ Don’t think the BGT index solves anything. The market is already priced in BGT because vaults set their bids in terms of BGT received.

Its a difference in concept. That "fee" is more like a redistribution of yield from 100% to BGT Boosters into 1/3 to BERA stakers, and 2/3 to BGT boosters. Its not "revenue" for Berachain cause they don't keep any of it. Token holders control emissions, they sell it through PoL, and receive the incentives in return so thats why its classified as Token Holder revenue and Bera displays almost 0 fees on Defi Llama. The fee I refer to would be implemented before this process, and the chain gets to keep it for buybacks or reinvestment. So Berachain takes a cut, then the remainder is split 1/3 to BERA and 2/3 to BGT

@nomad_ Why do you say there is 0 fee now? There is already a 33% incentive fee. #incentive-fees" target="_blank" rel="nofollow noopener">docs.berachain.com/learn/pol/ince…

Wot DAT? Wen DAT? Moon DAT? Seeing a lot of opinions about the $BERA DAT 👀 THC + the people’s champ Fent! (via @Bullas_ ) will try to make sense of it all. Joined by @nomad_ from @VaseFinance as our resident expert to break down what this means for @berachain🐻⛓️ 🗓️ Jan 2 ⏰ 6pm EST / 11pm UTC 👇

Let's chat $KDK Join us on X spaces on December 19th, 10am EST (3pm UTC). x.com/i/spaces/1nAJE…

The Beras Are Back In Town ❄️🍯 Join @The_HoneyCast and @nomad_ as they speak with Kodiak founders @0xbeartic and @BeraRodman to discover why $KDK will unlock a merry Beramas. December 19th, at 10AM EST. x.com/i/spaces/1nAJE…

Mint is Live 🔥 Stage 1 has begun! Lets Fckn BOOOOOOOOOOOOOOGA! kingdomly.app/booga-bullas

A deflationary NFT collection by @BoogaBeras x @TheBullas_ Pure leveraged BERA exposure with no liquidations. Perpetual treasury growth through fees and buybacks. 0 team allocation, 0 mint fees, 100% of mint proceeds sent to treasury.

YeetStrategy Update YeetStrategy (YAT) has now been live for 21 (42.0 / 2) days and continues to execute its mandate of disciplined, programmatic $YEET accumulation. The treasury currently holds: - 66.56m YEET - 20,666 iBGT Since launch, 11.5m YEET have been acquired at an average cost basis of 0.001655 WBERA per YEET. YAT now controls ~9.9% of the circulating @eatsleepyeet supply. As this share continues to increase, we anticipate growing reflexivity between ongoing treasury purchases and market pricing dynamics. Over the coming weeks, YAT will continue to accumulate YEET through a variety of execution pathways, including on-chain TWAP orders via @KodiakFi, opportunistic market buys, limit orders, and strategically positioned single-sided v3 ranges. YAT expects to conduct its first public raise via bond issuance on the yeetbonds platform in week 2/3 of December, followed by the first treasury redemption window in week 4. Full details of these events will be communicated ahead of launch. All treasury positions are visible at yeetstrategy.com/treasury. Thank you for your attention to this matter.