Kodiak

With PoL, the only way to gain the network’s governance token (BGT) is by providing liquidity to a set of whitelisted applications, liquidity pools, and/or vaults on Berachain. As a result, PoL provides a solution that ensures that liquidity grows in tandem with staking and that these staked assets remain liquid and readily available for the network’s various DeFi applications.

The initial set of whitelisted applications starts with the chain-owned DEX (BEX), perpetual futures exchange (Berps), and lending platform (Bend), but will quickly open to any smart contract deployed on the chain. We’ve worked closely with the Berachain Foundation to ensure that Kodiak’s Islands are compatible with Berachain’s PoL consensus mechanism, and as PoL matures, sweet BGT will flow to Kodiak.

Kodiak and BEX are not competitors, but rather complementary to one another. BEX is a multi-asset AMM that allows for liquidity pools consisting of up to 8 tokens. This offers users with a venue for users to pick from liquidity pools with a larger basket of assets to participate in PoL compared to only being able to pick from liquidity pools with two tokens in other traditional DEXes.

However, BEX does not offer a concentrated liquidity solution, which enables higher capital-efficiency and flexibility for Liquidity Providers (LPs). Additionally, one of the major concerns of concentrated liquidity in the PoL system is that users could sybil farm BGT emissions by providing concentrated liquidity that is either always out of range or in a very tight range. This is where Kodiak comes in with its unique Islands product.

Kodiak Islands automate LP strategies, simplifying concentrated liquidity provision. User deposits in Islands are pooled together into a fungible concentrated liquidity range — as prices move, liquidity is automatically rebalanced to stay “in-range.” Kodiak Island LP positions are uniquely designed to be eligible for PoL BGT rewards and also leverage liquidity on BEX for rebalancing Islands. Islands liberate LPs from continuous manual involvement, simultaneously fortifying Berachain with robust, in-range concentrated liquidity.