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:
Farming the $BFD-$HONEY Pool with Protocol-Owned Liquidity
The protocol farms its own liquidity pool, capturing rewards and strengthening backing over time.
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.
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