My thoughts on Berachain's latest POL update:
The original POL mechanism was a bit confusing for the average user to understand, which is why they shifted to direct $BERA staking. One-third of total BGT emissions is now allocated to support this new staking module.
The update caused a massive selloff in BGT liquid wrappers, as users questioned the need to use BGT tokens when they could stake $BERA directly.
Now, users can stake $BERA directly on the Berachain Hub. According to the latest data, it currently offers ~187% APR with 3.5M $BERA tokens staked. However, the APR will decrease over time as more $BERA is staked.
As of now, 4.9M $BERA is staked ( so the displayed APR is higher than the actual rate.
In contrast, liquid BGT wrappers are offering ~90-110% APR, which seems competitive in the short term. Once the market stabilizes and 30M $BERA is staked in the staking contract, the yield is expected to drop to ~30% APR, at that point people will start buying BGT tokens again.
The community is upset at Smokey for nuking the BGT's without a proper vote. I'm not sure what happened so I can't comment on that.
I’m buying the dip on BGTs here.
Yes, my Bera exposure is hedged. I am not bullish on Bera token.
APR getting lower, BGT premium going up
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