Berachain

+-----------------------------------------------------------+
|                     BERACHAIN                              |
+-----------------------------------------------------------+
|                                                           |
|   The Ponzi Chain - Milestone in crypto design            |
|   Three-token model with dividend + mutual-aid hybrid     |
|                                                           |
+-----------------------------------------------------------+

Three-Token Model

Token	Type	Characteristics
BGT	Governance	Non-transferable, only obtained through LP provision
BERA	Gas Token	1:1 one-way burn from BGT
HONEY	Stablecoin	Native over-collateralized USD stablecoin

Deposit-Withdrawal-Payout Model

Deposits

Provide liquidity to official DeFi suite:

Add LP to DEX
Borrow Honey stablecoin from lending
Provide Honey LP to PERP

Each pool’s reward ratio is determined by validator node voting (bribery mechanism)

Withdrawals

$BGT (non-transferable, can 1:1 convert to $BERA)
        +
$BERA (main token)
        +
$HONEY (algorithmic stable)

Sources:
├── $BGT inflation
├── L1 gas revenue
└── DeFi revenue

Payout Ratio Calculation

Monthly payout ratio = Monthly $BERA converted
                     / Monthly retained LP's total $BERA pool TVL

Collapse condition:
$BERA conversion amount > Monthly new retained BERA pool TVL + buy pressure

Analysis as Mutual-Aid Scheme

Berachain closely resembles DeFi summer’s “Pool 2 mining”:

token + ETH form LP deposit
        ↓
Earn inflation tokens based on LP share
        ↓
Sell tokens for profit

Key Game Theory

Accumulated $BGT staking returns
        vs
Direct BGT to $BERA conversion and selling

Answer yes → hold $BGT
Answer no → mine and dump

Analysis as Dividend Scheme

Maximizing sunk cost perspective:

Concept	Berachain Equivalent
Mining machine	LP deposit
Machine price	LP opportunity cost (impermanent loss, etc.)
Reinvestment/electricity	Stop LP or convert BGT = dilute share

Growth Flywheel

TVL ↑
  ↓
Token price ↑
  ↓
Activity ↑
  ↓
Protocol revenue ↑
  ↓
TVL ↑ (cycle)

But this flywheel has prerequisites:

Staking protocol revenue > Direct $BERA selling profit

If ecosystem protocol revenue can’t keep up with $BERA appreciation → users mine and dump

Solutions

Approach	Description
Demand side	Get high-kill-rate protocols (on-chain derivatives) to scale quickly
Supply side	Validator node extra rewards (new scheme bribes)

Validator Node Interests

1. Maximize TVL to maximize validator reward probability
2. Manipulate $BGT output favorably through bribery
        ↓
To gain TVL advantage, nodes need to launch more schemes
        ↓
Higher node APY attracts LP
        ↓
Win BGT bribery votes
        ↓
Easier to pump new schemes
        ↓
Schemes feeding schemes positive cycle

Berachain’s Milestone Significance

Using validator nodes to bind project teams to do split schemes

Ethereum: Only one Eigenlayer

Berachain: Number of nodes = Number of Eigens = Number of schemes

Compared to Luna:

Luna only did a single algorithmic stable mutual-aid + deposit interest dividend
Then looked for ecosystem to absorb bubbles
Berachain’s mechanism bundles project teams to launch schemes from the start

Like a carrot on a stick for donkeys - must keep launching, no TVL = no rewards

Core Formulas

Berachain essence:
├── Mutual-aid scheme with dividend characteristics
├── Three tokens separating rights and utility
└── Validator nodes binding project teams for splits

Collapse model:
├── Protocol revenue < BERA appreciation rate
├── Users tend to mine and dump
└── TVL flywheel reverses

Solutions:
├── High-kill-rate protocols scale up
└── Validators continuously launch new schemes

For public chains, this is the core problem. The great way is simple.