TLDR

In this episode, Jason interviews Smokey, co-founder of Berachain, discussing the innovative BoyCo program, the dynamics of the TVL and the implications of the $BGT and $IBGT tokens. Smokey shares insights on market performance, future initiatives to drive economic activity, and the cultural aspects of the Bera community. The conversation highlights the importance of user engagement and the potential for Berachain to evolve as a significant player in the blockchain ecosystem.

Chapters / Timeline

• 00:00 Opening

• 01:02 Introduction to Berachain and BoyCo

• 04:04 Understanding TVL and Bera Token Dynamics

• 07:03 The Role of $BGT and Market Behavior

• 10:07 Investor Perspectives and Market Pressures

• 12:54 Future Initiatives and Economic Activity on Berachain

• 31:21 Engaging the Community: Power Users and Protocols

• 33:34 Incentivizing User Actions: Beyond Passive Liquidity

• 35:56 Gamification and User Engagement Strategies

• 37:14 Tokenomics: Rethinking $BGT Emissions

• 40:57 Building Protocol-Owned Liquidity

• 44:10 Growth Strategies: Expanding Application Ecosystem

• 46:26 Cultural Dynamics: The Role of Community in Success

• 57:16 The Search for Viral Moments: Driving Adoption

Transcript

<< Jason Kam (01:03) >>

All right, we're live. Welcome to another episode of BidCast. I'm your host, Jason Kam, AKA Maple Leaf Cap. Today is May 5th, 2025, 1 p.m. Hong Kong time. BidCast is being live streamed with BidClub members. Questions are from the members and my own. Today I'm speaking with Smokey, the co-founder of Bera Chain. Smokey, welcome.

<< Smokey (01:24) >>

Hey man, thanks for having me.

<< Jason Kam (01:26) >>

Yeah, good seeing you in Dubai. It was fun. Well, here's an important question to you just to get us started. Tell us about the boyco and how it came to be. I think it's got, you know, two and half, three billion of TVL and the unlock for the Bera chain token is coming soon from it, a 10 million of it. When is that coming and what do you think happens to the chain afterwards? Maybe let's start with that.

<< Smokey (01:50) >>

Yeah, you

got it, Yeah, so a couple things. To answer your first question, think Boyco came as bit of what I think is somewhere between an improvement and I guess a spin on some of the existing pre-launch programs we've seen done for different chains. We've seen everything from having a chain or an L2 live without a token for a number of months and sort of trying to incentivize TVL on different applications. We've seen people incentivize bridge deposits, et cetera.

We didn't think that either of those are the right move. ⁓ we fundamentally very much view Bera Chain as a leverage bet on the application layer, right? If one was to sort of put Bera Chain in nutshell, it really is an accelerator for the app layer. And with that, we said, okay, well, what is the way that we can give the applications on the chain the absolute best chance of succeeding from day one? And I think that part of doing so is helping them bootstrap initial capital, right? And I'd argue it's more important for those third party apps on the chain.

to be able to do so than for us to be able to say, okay, yes, we've got this much dead TVL on a bridge. So that was the concept of Boyco, per se. And to answer your question, that capital or some portion of that capital, should say, and those Bera tokens will be unlocking in about one and a half days. So on Tuesday morning, EST, so not too far out now, what do I expect happens? I think a couple of different things.

I think that we probably see some of these positions roll over from these standalone vaults that were generating Bera tokens into yield earning or yield bearing strategies and in $BGT across the chain. I think we see a bunch of dead TVL or very mercenary capital bridge off the chain. And I think we probably see the chain revenue to TVL ratios ending up regulating a fair bit. Yeah.

So I think on one hand, I'm sure I will see a bunch of threads on Twitter that are like, fair change, TVL just fell in half or something of the sort and a bunch of exclamation marks and thread below emojis or something. But I also think I'll see very little change to the actual application layers and builders in the case of the TVL that didn't really matter.

<< Jason Kam (04:04) >>

Mm.

Do you feel like, ⁓ I guess there are two parts to this. There's the, what are those TVL doing currently? Are they ⁓ going to straight out, you know, exit their $BGT position? I guess they can't. And then the second thing is after this unlock and then the TVL sort of moves over, ⁓ do you expect them to outright sell the Bera token to get, or do you think it's already hedged?

And do you expect their behavior in the sort of TVL out provisioning be any different? Are they going to keep on sort of providing TVL on dumping or do you feel like the ones that leftover are a bit more or a bit less mercenary than before?

<< Smokey (04:49) >>

I suspected the ones that will remain are a little bit less mercenary than the initial groups. ⁓ I think that as a rational actor, I have to assume that every single token that is given out will be sold. That being said, there's obviously work that we're doing to ensure that ⁓ transition is done smoothly. ⁓ So basically, would say that we've actually set up a set of rollover vaults, if you will, that basically allow people to say, hey, I was in this position and I can...

know, zap over to that position. ⁓ Or hey, I've just gotten these Bera awards and now I can like deposit them in protocol X, Y or Z. ⁓ So yeah, I think we're trying to make it as easy as possible for people to take the rewards they got, or take their existing deposits and find something productive to do with them. ⁓ But you know, I always have to plan for assume for the worst case scenario.

<< Jason Kam (05:43) >>

And from your conversation with the largest TVL providers, do you feel like the hedge at the head of time or do feel like the heaven and they're just... I'm genuinely curious what those people are thinking right now.

<< Smokey (05:56) >>

I think that there's probably a meaningful amount that are hedged, especially for the more sophisticated LPs, but I cannot say for sure, you know?

<< Jason Kam (06:05) >>

Do you expect more boyco like structures in the future where you inflate more Bera tokens for TVL provisioning or this is kind of a one and done type of deal?

<< Smokey (06:16) >>

I think that there will be, I don't really expect to do that kind of a program in the future. I think there's definitely some good lessons from this. I think that on one hand, I think that we were able to draw a bunch of attention to good applications. And I think that it certainly gave them a bit of firepower and in some cases some of the best rates on swaps or borrow slash lend on ETH, et cetera.

But at the same time there was also capital that wasn't the most effectively used that we ended up subsidizing, right? So I I don't love that part I think that if we were to do anything in the future if we were to do it again It would be much more focused on majors, but I don't think the focus would be on TVL I think it would be a focus on you know, productive capital. There's natively fee generating

<< Jason Kam (07:02) >>

I feel like a this is why I kind of want to get you on this and talk you through the talk through this a is for my learning but but be ⁓ The price word today actually makes this very interesting which is one can perhaps make the argument ⁓ a large part of the Bera ⁓ Is hedged or if it's not maybe the hedges roll off? ⁓ This will be There will be like eight to nine months where there will be no more Bera emission

And ⁓ on Ethereum it's unlikely that the $IBGT or $LBGT of the world would be becoming a Bera So you have this asset that hopefully will have no net emission. The unlock that prevents people from getting involved is now gone. So you have this lease of life, so to speak, to really ramp up the protocol. ⁓

Am I thinking about the emission the right way or am I missing anything in the middle that could really change the supply-demand structure?

<< Smokey (08:06) >>

No, I mean, I think that's quite directionally correct. think that the thing to keep in mind, of course, that there are generally emissions is that we are an L1. in the case of proof of liquidity, you're very much fundamentally renting liquidity and network activity with those emissions as opposed to security as you would in a standard proof of stake chain.

So, but yes, I think that you've got the mental model correct. There's no other, you know, unlocks. There's nothing else hitting the market apart from just the general, you know, block rewards.

<< Jason Kam (08:40) >>

And before we get to the cool things that I'm sure you want to talk about, the new developments, I just want to get a... It took me a bit of time to get up to speed on what's going on in your chain. It's a little bit of a new concept for me. Maybe just some clarifying first and then we'll dive into the PDF for center growth. All of the emission happens in $BGT, correct? There's no emission in Bera. And...

<< Smokey (09:05) >>

Yep, correct.

<< Jason Kam (09:09) >>

The only form of liquid, like if I'm staking Bera outright, I would get $BGT, but that's not sellable unless I convert it one-to-one to Bera. But $BGT currently trades at a premium, so a rightful economic actor shouldn't be doing that.

<< Smokey (09:24) >>

That's

Yep, you've got it. I think a long-termist or rather an economic actor who's thinking about maximizing perhaps their yield potentials would likely say, I'm going to hold my $BGT. I'm going to delegate and or boost it to a validator and earn somewhere between 200 and 1,000 % yields. And then I'm going to perhaps in the future convert to Bera LP it, do whatever I like with it after.

<< Jason Kam (09:52) >>

And then the $BGT premium manifested through $IBGT and $LBGT created by Infrared and the other protocol, I'm forgetting. It's currently at a 30 to 50 % premium, is that correct?

<< Smokey (10:07) >>

Yeah, yeah, exactly. It sort of trades at Bera plus some future facing value of the bribes and or incentives I'll be going towards $BGT over time.

<< Jason Kam (10:16) >>

Yeah, and you would feel that that is the major source of driver to their premium that $IBGT has.

<< Smokey (10:24) >>

Yeah, I'd say that and of course some degree of implied value of that liquidity in that you're maintaining the optionality of having that $BGT, which is always redeemable for one Bera, along with the future-facing value of whatever might come towards it.

<< Jason Kam (10:39) >>

Why would anybody own $BGT versus the liquid portion, liquid parts of

<< Smokey (10:44) >>

Yeah, mean, great question. I think that you have a lot more control over what exactly you can do with that $BGT if you own the naked $BGT. And that notably, each validator has a different yield profile, right? And there's many cases where there's a validator and they'll have like, know, 500 % or 1000 % APY, while a, you know, given $IBGT or $LBGT type derivative will have, you know, fractions of that, Given especially the scale of some of those protocols as well.

So I think that there is value in being able to have that. At the same time, certain validators on Bera Chain will basically choose to accept incentives and or direct their emissions towards different protocols that may in turn give them incentives in the form of different tokens. So some groups might basically say, hey, I'm just going to profit max and I don't really care what like what tokens I get as long as I can liquidate them for max profits.

Others might say, hey, I'd rather stack Bitcoin or I'd rather stack stables and be much more selective with that. And of course, in the future, as we move towards fully on-chain governance, we do expect those holding $BGT to have a greater role ⁓ in actually being able to guide the network's decisions. But I'm not going to pretend that people care about governance to start, at least. I think that that has been a bit of a meme in many cases. But I do expect that role to evolve over time.

<< Jason Kam (12:11) >>

I see. So it seems like the difference is future potential benefits and incentives going to $BGT stakers ⁓ has additional governance step ⁓ for that incentive to go to, let's say $IBGT owners. It's not like, okay.

<< Smokey (12:28) >>

Yeah,

yeah, like I think that that's it's, that's partially true. It's also just like you have a greater degree of choice when you own naked $BGT than when you own $IBGT because in the case of $IBGT or $LBGT, you know, it's it's it's Berapaw or Infrared, choosing where your where your tokens are being delegated. As in, you know, which validators your your your $BGT is being staked to. In the case of having naked $BGT, it's it's it's sort of, you know, your call and

<< Jason Kam (12:54) >>

Got it. In a sense, it's a very clever mechanism. I want to spell out a little bit because ⁓ for most of these chains, the initial emission comes out and it's just nonstop dumping by every other actor. But in this case, it's cleverly circumvented as the initial ⁓ inflation comes in the form of $BGT. And because of the bribes dynamics, the high yield props up the premium.

⁓ and actually gives people incentives to own and purchase $BGT. So, ⁓ supposedly speaking, Bera should not be negatively impacted by any of these inflation. What we have seen, however, is a bit of a different dynamic, which is you can blame it on potentially market conditions. But why do you think, like I would have thought Bera would have performed better? There are a couple of reasons in my mind of why that might be.

I thought it could be because of the Boyco unlock. ⁓ I thought it could be because of the dynamics where all the Mercenary Actors are ⁓ max long $IBGT and then shorting and hedging Bera on the other side. I could see the reason of potentially no natural buyer of the token because everybody's kind of owning the $BGT to yield farm. ⁓

I guess it's not a fair question because you don't control the market, when you're strategizing the team and thinking about the price performance, ⁓ what do you think you could have done differently? Why do you think would have cost this price action that we see today?

<< Smokey (14:30) >>

Yeah, I mean, a couple things. I think that you've hit a number of the potential points. ⁓ And I think that they each have different degrees of truth, right? For example, you know, the long $IBGT or long BGG derivative short Bera trade is an idea that's been thrown around a lot. Sometimes it ends up being invalid just because like the funding rates on Bera have been pretty aggressive in terms of shorting, right? So, you know, unless you're willing to play that out for six to eight months, let's say.

<< Jason Kam (14:51) >>

Yes.

<< Smokey (14:57) >>

It can end up being a pretty tricky trade to throw off, not to mention that you really can't get any form of size into $IBGT as of yet. Though of course it's great for your retail trader that's thinking about throwing in a 100k or 500k or whatever it might be. I also think that like, you know, a couple things. One is that we found that for a meaningful period of time, there's still a fair bit of balance on exchanges from, you know, the Binance Launch Pool Program and presumably the initial airdrop.

that has very much tapered off towards the last couple of weeks, honestly. And I think that beyond that, if I was to be as bold as to say this, I would say that we are one of few protocols this year, or few protocols in the last few months, that has not scammed our launch, if I'm to say that relatively bluntly, in that we do not have a three-thread insider supply of a bunch sitting with

bunch of people are in one spam wallet. There's actually tokens in circulation. And that means there's tokens for people to sell. ⁓ And that's bit of a gift and a curse. I think a couple other things sort of slung away. ⁓ One was I think that as we transition from sort of like lighter stage, or what I should say is like, you know, the first form of POL, which is just pairs within the becks or native DEX, to sort of like a free for all. I think that we took the reins off that a little bit too quickly.

in that we opened it up to all these pairs that might not necessarily use Bera itself. And on one hand, that was great because it meant that there was lots of bribe revenue going towards $BGT and more and more incentive for people to hold $BGT. But it also sort of did not balance that equation effectively in terms of having enough reason for people to say, okay, yes, I'm going to hold the Bera token. Right? So I think that that equilibrium was not effectively reached in the first place.

And I think that that's something we've actively spent time and effort working on over last little while.

<< Jason Kam (16:56) >>

And this is also speaking on behalf of potentially other ⁓ Bera holders, just to clarify. ⁓ Do you guys crime and have you OTC any tokens yourself?

<< Smokey (17:07) >>

have sold zero tokens in any which way. know, no, and that's to, you know, like saying no, no, what's the right word? I'm not trying to double speak in any way. So it's not like, oh, I have an OTC, but I've, you know, sold through a market maker. Like, no, like they're, you know, myself and, you know, our team members have done nothing of the sort. No crime, perhaps not enough crime, honestly. Like maybe the crime was the answer. But I think that we're happier this way.

and are down to play a long game and sleep well at night in terms of legal and moral risk, if you will. We've had a of people ask us about stuff, but honestly, I think we've done things quite by the book, perhaps too by the book in some cases, and that's fine.

<< Jason Kam (17:49) >>

Yeah,

if anything, sort of large giveaway of Airdrops without any logging definitely contribute to the selling pressure over the first couple months.

<< Smokey (18:00) >>

Yeah, I mean,

100%. And like, look, there's lots of stuff that is on us that we could have done better too, right? And I'm the first person to, like, I believe that if you're gonna eat shit, don't nibble, right? I think that one of the things that we allowed to happen was sort of like this, like, know, Bera as a farming chain narrative to exist. And I think that we'll see more and more of that dissipate over time. But I think just given the DeFi heaviness and the DeFi focus and the ecosystem, and the fact that people could potentially even earn $BGT without having a $BERA

It's just like, okay, yeah, I'm gonna go farm on bera, right? ⁓ Interestingly enough, this really hasn't translated into as much of the market pressure as people might think. And that like 80 plus percent of ⁓ $BGT is still actually not redeemed and is just in the form of $BGT, either in LSTs or on the market somewhere else. ⁓ But I can understand why it can contribute to that image of like, okay, yeah, this is a chain for farming.

<< Jason Kam (18:56) >>

And the VCs receive, like the investors, ⁓ they're staked. I guess the unvested Bera positions can't be staked, but they earn $BGT. Is that correct? Okay.

<< Smokey (19:04) >>

Yep. Correct. That's correct. Yep.

They're in $BGT and notably, I think like at one point, we were getting a lot of flack for investors taking and I understand that. think, you know, again, hindsight is 2020. But we also raised our first round in, you know, in early 2022, when this was pretty much, you know, the standard operating procedure. So I think that what I can say is that the vast majority for blocker awards

do not go towards validator staking slash, know, Bera of stakers alone, they go towards protocols, participating in proof of liquidity and those vaults as a whole, right? So even though there is a staking rate for insiders, if you will, I do not believe that that is a contributor really to market action and also kind of very much aligns because we have every investor's wallet and knowledge of their selling or lack thereof.

<< Jason Kam (19:58) >>

And so far, I read somewhere there's only like 200k $BGT being converted to $BERA Is that roughly correct? I don't know if the number's handy. Yeah.

<< Smokey (20:06) >>

⁓ I would have to

double check on but I believe that like, you know I would actually think it's probably a little bit more than that and that there's been like I want to say like 12 million ish $BGT emitted over time And I think that out of that like 2 million ish has been redeemed something like that so like So that it kind of goes closer to that number that I mentioned I've like, you know, like over, you know close to 20 % only if $BGT has been has been redeemed

<< Jason Kam (20:24) >>

I see.

I see. Interesting.

<< Smokey (20:37) >>

And then I'd say

that the, notably the vast majority of that is actually, you know, from LSTs again, slash Infrared and their iBERA process. ⁓ So like, you know, that $BGT being ⁓ redeemed is actually just pretty much auto-compounding into iBERA, or a very large portion that is as well. So again, that's why some of those numbers don't particularly concern me.

<< Jason Kam (20:47) >>

Hmm.

Interesting. I thought that one point of concern is those that redeem at such a high premium and just, I don't know if they're straight out selling. Those are probably the merchant reactors who don't want ecosystem, but I could be mistaken. ⁓ And the last part about this housekeeping I want to get through before we go to the real questions. ⁓ Is there any real sinks?

<< Smokey (21:14) >>

Correct. Yeah, no, I think that's fair to a point.

<< Jason Kam (21:27) >>

⁓ that is current or planned for for Bera and $BGT at all in this market versus just straight-out staking

<< Smokey (21:34) >>

Yeah, I mean, like, I think there's a few different things within the ecosystem that have already seen quite meaningful uptake. On one hand, if one even just looks at a very simple, you know, Bera, iBERA type pair. like basically Bera paired against its LST within Kodiak, for example, that's often, you know, found itself to be in the mid double digit APYs So somewhere like the, you know, the 40 to 60 % range, our funding rates have been hilariously negative. So in many cases, you know, one can actually supply Bera on, on Wasabi.

and earn close to 100 % APY on that. Similarly, solid profiles in Euler and Dolomites, so lending markets. Each of those, they basically found themselves with some between 20 and 60 % yield profiles at different points in time. So beyond just pairing against other volatile assets and potentially taking on IL, I would say that there has been no shortage of, I'd say, what's right word? I'd say there's been no shortage of opportunities for

for people to do stuff with their Bera on chain

<< Jason Kam (22:36) >>

Right, but I guess do Beras get destroyed in one way or another through usage?

<< Smokey (22:41) >>

Ah, understood. I don't think that we're at that point yet in that like, know, Bera chain is basically, you know, fully EVM identical. So, you know, even our gas logic is identical to Ethereum's, right? And that means that, you know, it's meant to take some time and have a little bit more action prior to those gas prices actually, you know, driving up and EIP 1559 really kicking in and being able to see meaningful, I'd say, Bera destruction, if you will, by that method.

<< Jason Kam (22:44) >>

Hmm.

<< Smokey (23:10) >>

That being said, do believe that we'll see more and more changes in the not too distant future or improvements, if you will, that will help to take Bera off the market and to drive more value towards bera over time.

<< Jason Kam (23:24) >>

think that's a good segue because naturally going over time because bera is a layer one chain ⁓ that needs economic activity over time. ⁓ I would imagine the burn activity comes from people doing real stuff on it. ⁓ What are some of the biggest initiatives that really excite you going forward? One or two or three that you feel like could really kickstart economic activity, sort of change this?

perception, your farming chain, like what are some of the most exciting things on the horizon you're working on?

<< Smokey (23:58) >>

Yeah, man, where to start? I guess I'll throw a few different ones across different sectors. One that I think you are very familiar with as an investor is called PuffPaw. So, you know, for viewers who are a little bit less familiar with that, PuffPaw is a quit smoking to earn deep in project, built natively on bera chain, super experienced farming, fuck, founding team, I guess Freudian slip there.

with experience basically building Web2 vaping products for an extended period of time and shipping for leading brands in the space. They've already done $7 million in sales, have deals with some of largest vape distributors across APAC. And what's quite interesting for them, in my opinion, is on one hand, besides interesting sort of node slash game theory and then virality vectors, is that they're monomaniacally focused on building a product that Web2 users and laypeople can enjoy.

And on one hand, it can actually have positive health benefits of being able to reduce people's nicotine consumption over time as they effectively earn more tokens as they smoke lower concentrations of nicotine. But on the other hand, actually procure somewhat interesting healthcare data that can even plug into these cognitive behavioral therapy type solutions. ⁓ So I believe that those are the types of projects I can very easily scale to tens if not hundreds of thousands of users.

and have those people, you know, transact on Bera chain with very little lift. It can be sort of these like mass distribution events. It's the same tune. There's groups like wombo slash w.ai. These guys, if you've ever seen a picture of, you know, pregnant Biden and Trump kissing or something of the sort, they're likely responsible for it. They have a consumer AI app that was quite viral 200 million plus downloads.

You know, still eight figures of active users and they're actually looking to effectively back end that into a decentralized, you know, compute aggregation platform where a user who has an application on their, you know, phone or web app can actually, you know, basically contribute their passive compute towards, you know, the W.AI protocol. The issue with most of these protocols is that they're a grift because no one wants the actual compute, right? And it's like, cool, I've got all these like H1000s or whatever, but who cares?

And on this side, since Wombo actually has a successful Nvidia back to utilizing, you know, real people, web app and, and, and, you know, mobile application, they can actually dog food the product and actually be their own first customers before selling into another number of other locations. So I think that gets very interesting. I think groups like over under are very exciting to me. They're a computer vision powered e-sports betting platform.

⁓ built by X NSA and Robinhood guys. And they've basically trained on ⁓ a number of different e-sports streamers and their gameplay and use that to basically identify the odds of a given event happening in game. And what gets really exciting there is that ⁓ with, I'd say, a very small number of streamer partnerships and a couple thousand users, they're ready cashflow positive and growing quite rapidly. And they have massive horizontal distribution potential.

Because with user retention stats of an average of 30 minutes spent per day per user, five hours per power users, et cetera, and a 10 % rake on that volume, I think that's very much something that can very easily scale to, again, tens or hundreds of thousands of users by using Bera chain for settlement, using POL to incentivize utilization of the application, or VIP type programs, and actually allowing people to do something that they want to do.

There's all sorts of weird spicy stuff in between from compute loans to people building digital passports for pet identity that's working with some of largest pet stores in the world to people building fan engagement platforms for large sports teams and soccer groups to some of the largest market makers in the world and precious metals all come into Bera chain think that those are all groups I think see the combination if on one hand.

⁓ a real user base and community that's ⁓ interested in and excited to engage in some of these projects. And finally, a chain that's actually been built from the ground up to act as an accelerator for its applications and help to reduce the customer acquisition costs and drive value to those apps themselves with the hopes of effectively constructing a chain level venture portfolio that allows for the greatest degree of success and the greatest potential for UnicornBets to come out of that ecosystem.

So yeah, mean, yeah, those are sorts of some of the ones at a high level that I think will be very interesting both from a distribution and fee generation point of view, simply because they'll have, you know, thousands and thousands of users hitting bera chain whether they realize it or not.

<< Jason Kam (28:59) >>

That's helpful. guess a couple things there. ⁓ Are these heavily liquidity dependent protocols? I'm assuming they are self-contained, they don't need billions of dollars sitting on there to be drawn. Are they attracted to you because guess Bera chain give them Bera token grants and that's why they're attracted?

<< Smokey (29:06) >>

Mm-hmm.

Yeah.

<< Jason Kam (29:26) >>

What ultimately attracted them? it the users? Is it like, yeah.

<< Smokey (29:27) >>

Yeah.

I think that, ⁓ so the nice thing is like, we don't do grants of any sorts. And we've always kept it that way. We think that, you know, if anything, POL is the closest thing that one can get to like a perpetual grant to the chain level. Of course, it's not a free grant. It's a grant that comes at a bit of a discount, if you will, in that, you as the application are hopefully paying 80 cents and the chain is giving you a dollar for your LPs. I think that it's been a combination of factors.

To answer your question, think that a lot these are not deeply liquidity centric and that's kind of a good thing. There are of course like variants like on the other side, there's a group called like Daylight for example, which is like a D-Pen slash RWA project for decentralized power grids. And they work directly with like with local PPAs to enable users to aggregate and contribute power to wider grids and to perform a part of that marketplace. Those guys will be looking to bring in, know, hundreds of millions of dollars of capital.

to actually finance our operations and throw off quite meaningful yields. But I'd say that a lot of the other groups, including Daylight, have come to us for one of two reasons. One is that I think that we have a very sort of outbound user-facing and developer-facing customer acquisition effort. And we try to very much be an extension of the team wherever we can. Some of these groups also ended up going through sort of the accelerator program that's arm's length to bera chain called Build-A-Bear.

So puffpaw and overrun during paw pass are each examples of that. That were sort of like, you know, where we helped along the way as a team was building out. In many cases it's that, you know, the team either has a great idea and a great product, but has no idea how to pitch or, you know, a really good, you know, pitcher, but no fucking clue how to do product. Like they just have some part of the equation missing. And then I think on the other side, a lot of these groups,

we're able to see that there's actually a community of like rabid power users that want to try new things and want to be that first audience who actually interacts with exciting new protocols and things being built on chain. ⁓ So I think a lot of it was, you know, ⁓ the right degree of proactive business development and really getting your hands dirty and finding ways that POL can benefit the applications themselves. And on the other hand, ⁓

really just, I'd say doing the work of figuring out how we can make apps win.

<< Jason Kam (31:55) >>

So the TVL heavy ones it seems is pretty straightforward like daylight. This is a good place where you can bribe your way to billions of TVL Rightfully so and that's if that attracts them and then for the crazier applications Their belief is ⁓ a feverish sort of audience base Naturally serves as onboarding to them even though they don't get the proof POL token incentive

<< Smokey (31:58) >>

Yeah.

Yeah, 100%. And I think that like, but that will very much evolve into is, you know, some of those groups that want that feverish audience base, finding the action set or the group of actions within their protocol, that's most exciting for them. And then incentivizing that, because I think that a common misconception, this is our fault, because it's almost something that we learned more about in post or as a chain went live, is that, know, while POL and proof of liquidity,

sort of points towards active liquidity at the highest level. What gets most interesting, arguably, is when that can be used to not just incentivize passive liquidity, but actually, you know, a given action, right? So a certain amount of volume being done on a perps dex, a certain amount of spins being done on a casino slash betting project, a certain level being reached in a video game, a certain amount of hours being spent, whatever it is. As I think we believe that many applications

⁓ have a point or a sort of an inflection point within their life cycles, or sorry, within a user's life cycle, where that user becomes infinitely more valuable to that app. And if POL can actually be used to help users get to that point, then I think that becomes very interesting as well.

<< Jason Kam (33:34) >>

That's actually a very important point. I don't think it's ⁓ well disclosed or well discussed. I believe there's a new initiative where the $BGT emission focus could shift in the future from purely being TVL to hopefully well structured on-chain activities, ⁓ which has more to do with, know, DAU growth to a protocol or on-chain transactions. Is that roughly correct?

<< Smokey (33:53) >>

You've got it.

Yeah, and I wouldn't even necessarily say DAU or I imagine it's more just like user value, right? Because if that means that you take one user and turn them into like your absolute turbo-whale power user, then sick, right? If that means that you can, you know, build a VIP program, awesome. If that means that you can build a, you know, sort of spicy MLM program that allows you to onboard lots of people, also works. You could very much figure out a program where you effectively give someone a receipt token.

if they manage to onboard a hundred other people to a platform and incentivize that action, right? Like, I very much think that the sky's the limit for what you can incentivize with POL because you can very much find a way to issue a dummy receipt token that is representative of a given action and then use POL to drive value towards that. So I think that that gets really cool of you if one is creative enough in what needs to be done.

<< Jason Kam (34:51) >>

I see.

How soon could this be pushed out, you think?

<< Smokey (34:58) >>

It's already happening. like the first use cases that we've seen have been in purpose volume. We've seen groups put forward applications in the forums for like effectively like trading bot volume as well. So thinking like incentivizing trading and engagement on effectively like small slash low caps. I think those are both really interesting and I think we'll see more and more exotic applications this in the next little while.

<< Jason Kam (35:24) >>

⁓ The other thing I think

we talked about... Yeah, go ahead, sorry.

<< Smokey (35:27) >>

I was so like, know, I can very much imagine something where, you know, Puffpaw looks to incentivize people who are, you know, hitting, you know, who are basically using their application or using that vape, like on a daily basis up to X period of time in the same way that, you know, certain games you log in and you get a bonus every day for seven days or whatever it is. Right. I do believe that there's a really interesting gamification layer. I was even thinking about, you know, could we collaborate with kind of on like a, a yapper vault of some sort. Right.

There's group works that the bera baddies want to do in terms of a content generation vault. All these things, of course, get increasingly ⁓ nuanced and spicy and subjective as they get more complex. And of course, you need better guardrails in place to make sure they aren't extractive. But at the same time, I think that if used ⁓ thoughtfully enough, POL can be an absolute weapon for people looking to build an ecosystem.

<< Jason Kam (36:23) >>

It's kind of a complex topic because there needs to be a way to track these things such that they I guess, can be gamed. And I would imagine in the end it translates to economic value of the chain. ⁓ So one other thing before we get to this holistic economic equation, which we'll talk about in a second, but the other thing I think we talked about is ⁓ the $BGT today is emitted ⁓

<< Smokey (36:38) >>

You've got it.

<< Jason Kam (36:51) >>

to protocols and to stakers, but none of that goes towards, ⁓ know, Bera chain to protocol, or none of it goes towards sort of occurring to Bera chain itself. Is there any plans to change the tokenomics a little bit to sort of make this emission more value creative in that way, sort splitting up the $BGT emission?

<< Smokey (37:14) >>

Yeah, I mean, I think that you hit it on the nose. And it's something that's been the topic of discussion within the community, within myself and in liquid funds, founder friends or investors, cetera. And that right now, I think there's an argument that $BGT can be a little bit too OP. like, know, gift and a curse, right? Gift because it means that there's lots of $BGT sort of basically kept off the market, slash prevented from redeeming it to bera up.

which is great for us from like a, you know, sort of a flows point of view. But also it's not enough to just reduce sell pressure on Bera. There has to be a reason for it to go up as well, right? Beyond speculative premium, especially in a sort of like wacky market like this. what has been increasingly contemplated, and I suspect that there will be some version of this that is ultimately implemented, you know, subject to governance and community sign-off is effectively, you know, a sort of a variable rake or tax.

you know, bariffs, if you will, ⁓ on the bribes that are going towards $BGT. Because right now, even at the lows, like, you know, $BGT bribes are receiving between $75 to $100 million, you know, annualized, and it leans on the upper side of that, to be clear. You know, so within the first, I think, five weeks, it's like 10 million bribes. ⁓ So that's like pretty non-trivial. ⁓ And what we believe is quite interesting there.

is to actually have a portion of those bribes going towards building protocol-owned liquidity for bera $HONEY, which is one of the most traded pairs in the ecosystem in the chain DEX. Because what you get that way is that on one hand, you effectively get eight plus figures of pressure going towards building that bera $HONEY LP over the course of a year, assuming that the rates stay constant and that that is a reasonable representation of the future.

along with the ability to consistently generate an ideally auto compound fees from bera $HONEY LP itself in the DEX slash the chain native DEX which can, at its peak has thrown off a hundred K a day. And I believe could quite feasibly throw off 25 to 50 K a day as it scales again. Right. So we think that that gets quite interesting because on one hand, I think it allows a number of different groups and a number of different protocols to enter the bera chain ecosystem.

and bribe ⁓ and still drive values of the Bera token, whether it's a stable pair and LST pair, et cetera, and not be seen as this extracted while at the same time driving direct value to Bera in a manner that is actually, I'd say growth oriented as opposed to like just doing like buybacks or something to say buybacks We think about this as how do we actually build something that has the ability to compound.

<< Jason Kam (39:59) >>

And just to just just I understand it clearly ⁓ Currently $BGT is emissioned bribe is being paid back to ⁓ the $BGT stakers and validators What what is being talked about is a percentage of those bribes being taken to I guess through you guys and goes into being sold for $HONEY and Then gets added to the $HONEY bera repair. Is that fair?

<< Smokey (40:26) >>

Yeah, it would depend on the composition of the bribe. Let's say the bribe is like 80 % Bera, right? Of course, in that case, we wouldn't try to sell Bera for $HONEY. But what we might do is say, okay, you can take that Bera and match it against $HONEY that's generated from the DEX fees at the moment, right? And then contribute that to Bera $HONEY LP. So effectively taking non-bearer denominated portion, effectively nuking that into $HONEY, pairing that against the Bera.

and adding that to the backs.

<< Jason Kam (40:57) >>

Why not just straight up buy a $BERA ?

<< Smokey (40:59) >>

You could, but buying $BERA alone is just that, right? And I think it's actually even more fighting gravity. I think that what we can do by actually having that contribute towards protocol-owned liquidity is that on one hand, that's a little bit more, I think, in line with the thesis of bera chain as a whole, in terms of just actually finding ways to have the applications drive value to the chain and vice versa. And beyond that, actually reserves the value to compound, right?

So one could say, okay, cool, know, take $30 million and buy Bera or you can say, okay, take $30 million and 15 million of it goes towards buying Bera as part of this Bera $HONEY LP. And that Bera $HONEY LP then starts generating, you know, 50 K a day. And that 50 K a day becomes $18 million a year, right? Of course I've, using naive and or, you know, sort of not ⁓ fully nuanced math there, but I think the goal is to build something that can actually be growing in value over time as opposed to just

you know, saying we're going to do buybacks because it's hot right now.

<< Jason Kam (42:01) >>

I think that would marginally help. Right now, help me think about this. So 10 % of annualized inflation in $BGT, how much value are the validators and stakers getting back in bribes versus that? Is it like a two to one, five to one, six to one today? Do you have a goal to where you want to get it to? Yeah.

<< Smokey (42:09) >>

Mm-hmm.

Mm.

Help me understand the question a little more as in when you as in like basically for every you know dollar of $BGT emitted how much is like a valid or a staker earning kind of thing? Okay, got it. I mean, I think one of the better representations of that is kind of like the the $IBGT slash like, you $LBGT premiums, right? Because I'll basically tell you that like, you know, people are pricing that including those emissions at between 30 to 50 % premium.

<< Jason Kam (42:27) >>

Yep.

Yes.

<< Smokey (42:50) >>

And I do expect that to decrease over time quite naturally as the supply of $BGT increases, right? ⁓ Unless people just, and I believe that at that point, a bit of an equilibrium will also be reached where supply of $BGT will increase. Then some people will say, okay, these yields are, you know, aren't high enough to be attractive for me. They nuke it into Bera. Then they, you know, do whatever with that Bera. Maybe they sell it off, et cetera, rinse and repeat.

<< Jason Kam (42:51) >>

Thank you.

I see that would make sense. I guess the equation what I'm trying to arrive at is $BGT is being admitted. ⁓ The bribes go back to go straight back to the people that sort of own the $BGT and are staking it. In the future, what could happen is ⁓ because that's just kind of a TVL game sort of, but in the future, ⁓ a big part of $BGT would go towards those that don't stake like or don't provide a TVL, but they are contributing activity.

Additionally, part of the bribes also goes towards activities that, well, effectively directly supporting the Bera token or becoming an LP pair. I guess, is there a goal in your mind of how big those activities would be to really start hitting the goal in your mind? And how soon do you think that'll happen?

<< Smokey (44:10) >>

Good question, I think the tricky answer, unfortunately, is that it depends. But I think that some of these applications that I'm most excited about will very much be in growth stages within the next two or three months. And that, for example, Wombo is pretty much ready to go within the next month or so. The PuffPaw guys just set up their foundation. OverRender is live and in beta at the moment. And I suspect after a little bit more product testing, we're probably going to mass expansion mode. PawPass is building out their infrastructure at the moment.

You know what mean? I think a lot of these are not like SoundCloud wrapper, like big things coming, know, months and months away. I think they're actually very much either accessible at the moment already or on the horizon in a manner that's accessible to people.

<< Jason Kam (44:58) >>

I see. So I guess in the short term, just get through the Boyco Unlock and then work on all of these ⁓ effectively BD activity on chain, getting more protocols to launch, contributing to the burn, and then pushing through the two changes that we talked about on shifting $BGT incentives from just pure TVL to on-chain activity or anything that signals real economic activity, and then potentially adding the Bera to, ⁓ it basically adds to a protocol on liquidity that drives fees. ⁓

<< Smokey (45:27) >>

Yeah,

<< Jason Kam (45:28) >>

Am I

<< Smokey (45:31) >>

I think you've got a good sum up there, And I think it's almost equal parts fundamentals and narrative, right? In that I think that on one hand, being able to be able to say, hey, this is how this actually expands the fundamental scope of applications that will make sense on bera chain because they don't just have to be paired with Bera. They don't just have to utilize Bera, et cetera, to actually contribute to Bera's value. Of course, it'll be, you know,

favored and think that we'll see greater focus on ones that do utilize Bera because then you sort of get like a nice double whammy. But I think it's actually something that increases the net TAM of things that are interesting and that may want to engage with Bera chain. And then I think that on the other hand, it's actually about us just being able to tell that story more. And I think that we've always like to date, like, you know, we have shied away from, we haven't done anything with, with KOLs or, you know, sort of a non-inorganic marketing, if you will.

And that's to say that we're going to lean into that either, but I do think that we can do more concerted growth pushes and actually do a good job of telling people about all these things. ⁓ Because I think over time, ⁓ these are ultimately the types of businesses that are palatable and make sense to later stage institutional capital allocators. And the ultimate positioning or the ultimate way that I imagine that people will view bera chain is almost like a bit of like a Y Combinator at a chain level, right?

in that the chain itself is helping to effectively reduce the customer acquisition costs or bridge the gap for this portfolio of like 50, 100 early stage companies. And even though the chain itself will be a little bit of a loss leader to start, let's say it ends up having like net two, 3 % inflation when considering the offsets from bribes and index fees and stuff like that, one can very much see that over time, if two of those companies ends up

you know, making it out the hood and then that actually getting meaningful adoption, then I think that pays massive dividends to bera itself, right? Not in the financial sense, but in the colloquial sense. ⁓ So I think that being able to really build out that vision ⁓ and have it be something that think growth stage investors can align with as well is quite important for us because I think it's a lot easier to say, hey, this chain allows all the things that are built around it to succeed more than anywhere else. ⁓ And I think that's

a bit more of a palatable narrative than, know, here's this chain and you hold this token to get more of this token over time. And, you know, of course I'm a little bit biased as I am sort of pitching my own vision here. But I think that from the conversations we've had so far, that idea has resonated quite well with people.

<< Jason Kam (48:12) >>

What's your, I think that's a good guide point. think it would be sort of transactional volume and transactional fees in combined, hopefully, eclipsing ⁓ the $BGT inflation giveaway. ⁓

<< Smokey (48:24) >>

I think it'll

be that and something to be said about like user count and network effects that are downstream of that. ⁓ Because, you know, in many cases, like I actually, you know, there's, there's worlds in which we have millions and millions of transactions and then, perhaps actually just like, you know, gas feed up. But I think that that takes a while. And, know, if there's anything that we've seen from Solana that isn't always the easiest way to win. But I do very much think that you can get enough distribution from that to find real massive sinks for a token.

<< Jason Kam (48:54) >>

What's a KPI for yourself, let's say towards the end of the year or 2026 to drive that economic activity? What would categorize success for you in that front?

<< Smokey (49:05) >>

Yeah.

I think that there is a series of North Star revenues that we think about, or North Star KPIs, my apologies, that we think about. On one hand, we look at the effectively bribes and our $BGT volume that's coming in and really how much value is going to the $BGT token, and how much is coming into the system as a whole for bribes. Because that's really one of the best sources of economic health, et cetera.

I think that alongside that, we'd look at on-chain volume, we'd be looking at fees slash revenue, transaction volume. ⁓ If there's one that I'll be thinking about the most, it is probably that bribe ratio in terms of both ratio and magnitude. ⁓ Just because I think that tells us how much people are willing to put up and how much people want ⁓ effectively the Bera token and or the closest thing to the Bera token in the form of $BGT.

<< Jason Kam (49:35) >>

Hmm.

<< Smokey (50:01) >>

And I think that, you know, from there, all the other stuff is downstream because if we've done that part right, then we should also be seeing meaningful transaction volumes. We should also be saying, you know, non-trivial TVL. We should also be saying non-trivial DEX volume, so on and so forth.

<< Jason Kam (50:17) >>

and where are they now and what's the target.

<< Smokey (50:20) >>

Right now they're like, you know, not too crazy, like, you know, 50 mil a day of that. And I think that, you know, where I'd love to see us, you know, did you say end of 2026? Okay. I mean, look, I think that I would love to see that like, you know, 250 mil plus a day by, you know, by the end of the year. And I think that, you know, by the end of 2026, probably want to double that at least. And I think that, know, ⁓ sorry, not transactional volume. That's like, like, like, dex volume per se.

<< Jason Kam (50:29) >>

Sure. Or whatever target you connect yourself to.

has actual volume on chain. is.

<< Smokey (50:49) >>

And if I was to look at transaction volume, think we're doing about like a million a day right now. I think that we'd probably like at least five X that if not more. like, you know, I think that, you know, sort of five and 10 million would be sort of like next milestones for us, if you will. For context, ETH is normally between like, you know, like one and 1.2, 1.4 of that. So like, I don't think that that's a crazy high bar for us to hold ourselves to either.

<< Jason Kam (51:12) >>

Do you foresee a day where ⁓ the bribes eclipse the $BGT admitted?

<< Smokey (51:17) >>

Unlikely. ⁓ Just like in that, think it's irrational in most cases, unless an application is incredibly bullish on the future of know, Bera, slash $BGT, etc. To be like, yes, I'm to pay more than a dollar for a dollar, even if that dollar that they're getting is yield bearing, like which is the one situation I can understand that framing within. ⁓ But I think it's a little bit of a tough sell otherwise, you know.

<< Jason Kam (51:40) >>

⁓ How do you fund your operations today? Like all of these, the cost that you do, do have a treasury of VC raised capital that's USDC yourself? Are you selling Bera Like how do you fund your operations?

<< Smokey (51:53) >>

Yeah, so was a zero Bera selling and we're hoping to keep that this that way for as long as possible. know, on one hand, recently the the foundation moved, you know, effectively the USDC that's collateralizing $HONEY, or stablecoin into Coinbase. That's helpful in terms of earning yield there. There's also a deal with PayPal USD, which I would not ⁓ disclose the exact terms of but effectively allows the foundation to earn a cut of the the PYUSD yields.

that are basically, I should say the T-Bow yields from underlying PYUSD across the ecosystem. And I think that that's probably one of the more healthy ways to go about it in that the goal is to get to a point where it's sort of like break even and or cash flow positive off of stable revenues alone. I wouldn't say that we're there as of yet, but I think that that's also a very feasible goal because then you sort of de-risk the foundation dumping on your head part of running a company.

and investing in a token.

<< Jason Kam (52:52) >>

I think the way I think about it, you kind of need the flywheel to spin the other way, which is ⁓ something that creates significant wealth effect as an underlying consumer product that ⁓ soaks up Bera and $BGT. then ⁓ I think that would create demand for Bera and then expand the premium for $BGT. And then in this process, you know.

<< Smokey (53:12) >>

Yep.

<< Jason Kam (53:17) >>

Effectively attract activity and TVL out back in again and then that the loops flex this the other way Until that happens you're kind of just grinding to get more activity on chain And you have maybe like eight to nine months to do so aggressively so that it becomes stable. Yeah

<< Smokey (53:20) >>

Yep.

For sure.

For sure. And I think that there are certain products that I think have a fairly high chance of doing so, especially those that have a little bit of an element of looping in there.

<< Jason Kam (53:42) >>

Hmm interesting. When are those coming you think?

<< Smokey (53:46) >>

I think that the infrastructure for them already exists and the actual plays themselves will probably exist in the next couple of months.

<< Jason Kam (53:54) >>

Got it. Understood. ⁓ Is there anything else we haven't covered yet that you're really excited about? I think we covered the potential POL change, we covered the Bariffs we covered some activities that you feel like could really jumpstart on chain. ⁓ We talked about Boyco Is there anything else? Am I missing anything here with the thesis?

<< Smokey (54:12) >>

Yeah.

You know what?

I think that one part that's intangible but is a little bit interesting and is often a meme, but I'll throw it out there because I do believe that it's an important part of the bera chain ecosystem or thesis is that like, I think that culture is one of the most difficult things to quantify, right? And I think that one can try to ascribe a number of different characteristics to what is culture, if you will, at the chain level.

But I think that whether that be, you know, the NFT ecosystem that Bera Chain originally sprung out of, whether that be stuff like MiBera Maker or Steady Teddys, whether that be stuff like the Bera Baddies I think Bera Chain has like a fairly rich culture that ultimately translates to interesting, you know, barbell effects. And then I think you sort of have two types of people primarily on Bera Chain. One is your giga mercenary who's like, I can make money here. I'm going to be here to make money.

And the other is like the, really fuck with the vibes here and I'm going to be here because I fuck with the vibes and I'm quite price insensitive because I'm entertained by this. And what's interesting is I think that you can find, you know, ultra wealthy folks on both sides of that spectrum. And that I recently had the pleasure of meeting one of our larger whales who has, you know, a very meaningful Bera position. And he was like, yeah, man, I'm here because of the steady teddies. Then I slung like, you know, 20 bucks in here. And I'm like, all right, that's sick.

Thank you for your service. ⁓ And I think that's, you know, easier said than done and something that's quite difficult to underwrite and very interesting to see in action. I would give a particular shout out to the Bera Baddies as well, because even though like, you know, people like to make fun of them at times or gives them a hard time for being girls in crypto. I think that I've rarely seen this degree of speed and depth of penetration of a community.

in that if you look at like, you know, number of the girls on crypto Twitter who either work at different companies or are getting deeper into the space, you'll start to see Bera Baddies in their bio. They have like close to thousand girls who were signed up. Like 500 of them have completed like a course on how to use POL and like gotten like certificates and stuff, which is hilarious. And I actually think that they will be an absolute weapon when it comes to distribution for content and broadly applications on Bera and overtime. Like they have like, you know, streams on a

weekly or bi-weekly basis that end up pulling in, you know, five to 10,000 users quite regularly. And I think that's nothing to scoff at given that one of the biggest issues that crypto has right now is distribution as a whole. So I think that when you, you know, take an interesting financial system in POL, combine it with a incredibly strong application layer in some of the groups that I mentioned among many others, and then sprinkle a community slash culture element on top, then you end up with a very interesting package in terms of, you know, catering to

social, emotional, and financial needs, if you will.

<< Jason Kam (57:06) >>

Yeah, I suppose all that it takes then is for you to find something that is, potentially go viral and drives a lot of that back to the chain, right? You kind of just waiting for that.

<< Smokey (57:13) >>

Yeah.

Yeah, I mean, I think that every chain ideally finds its like eureka moment or it's like, you know, it's golden goose. And I think that again, until until it's at that point, it's like a shots on net venture approach. And I have no issue with shots on net.

<< Jason Kam (57:33) >>

Cool. Let's see if the group has any questions. Let's give it three seconds.

Smokey, thank you so much for your time. Get some rest.

<< Smokey (57:47) >>

Of man, thank you so much for having me.

<< Jason Kam (57:49) >>

Yeah, thank you so much. Don't hop on.