Bribes and Bribe Efficiency

BeraFlowDao utilizes unbacked $BFD tokens as bribes to incentivize validators. The goal is to recover all value lost from minting unbacked tokens through efficient protocol mechanics. These mechanics currently include:

1. Farming the $BFD-$HONEY Pool with Protocol-Owned Liquidity

   • The protocol farms its own liquidity pool, capturing rewards and strengthening backing over time.

2. Encouraging Demand for $BFD

   • By attracting users to buy $BFD and provide liquidity (LP), the token price and its premium increase.

   • This premium is later captured through new Gatherings, growing the protocol’s treasury.

Bribe Efficiency and Value Capture

Currently, for every $1 million worth of $BFD used as bribes, the protocol receives $6 million worth of $BGT in return (1:6 bribe efficiency).

Capturing this $BGT is crucial because:

• The $BGT emissions are used to boost the validator, which then directs more rewards to the $BFD-$HONEY pool.

• This increases $BGT emissions to the pool, enhancing farming rewards and liquidity incentives.

Sustainable Bribe Strategy

Although printing unbacked $BFD temporarily reduces the token’s backing by increasing supply, the protocol ultimately profits from this approach because:

• Bribes generate investment appeal, driving new participants into the ecosystem.

• The protocol farms its own emissions, capturing more value than it initially spends on bribes.

With a 6:1 bribe efficiency, BeraFlowDao gains more value from bribes than it prints, increasing token backing and offsetting any dilution caused by unbacked $BFD issuance.

How Users Benefit

For users this strategy provides greater farming rewards while ensuring a low-risk and stable liquidity environment:

• Higher $BGT emissions mean users farming in the $BFD-$HONEY pool receive more $BGT rewards over time.

• The low-volatility nature of the pool makes it a safer farming option, as it is backed by the protocol’s treasury and its sustainable incentive model.

Ultimately, this approach maximizes user rewards while ensuring the long-term growth and stability of the BeraFlowDao ecosystem.