Berachain's PoL Mechanism and High-Yield Mining Strategy

The current market volatility has lasted for two months, with secondary altcoins lacking new narratives and the primary market also lacking sustainability. For investors, aside from waiting and observing, investing their quality coins and stablecoins into Mining to earn passive income is also a good choice.

The public chain Berachain, which has a built-in DeFi mechanism, has launched the PoL (Proof of Liquidity) mechanism, with yields reaching over 100% APY. Let's take a look at the mining opportunities on Berachain.

How PoL Forms a Flywheel Effect

1. Users provide liquidity: Deposit assets into the dApp's liquidity pool, receive receipt tokens, and stake them in the reward pool to earn BGT, providing initial liquidity for the ecosystem.

2. Validator Allocation: Direct the BGT emissions to the reward pool with the highest returns based on the incentives provided by the dApp. As more BGT flows into the popular pools, user yields increase, further attracting more users to join.

3. dApp Competition: To attract validators' BGT emissions, dApps increase incentives and deepen liquidity.

4. User Delegation: Users can delegate the BGT they earn to high-performing validators, enhancing their block proposal weight, thereby earning more shared rewards and incentivizing validators to continuously optimize BGT distribution strategies, creating positive feedback.

5. Ecological Expansion: As liquidity and user participation increase, trading volume and dApp usage rise, network value improves, attracting more users and developers to join, accelerating the flywheel.

This flywheel effect creates a collaborative relationship among dApps, users, and validators, breaking the dilemma of insufficient liquidity and uneven asset distribution in traditional PoS.

Mining Strategy

1. Core Blue Chip / LSD-based "Stable Layout"

Core idea: Choose a relatively core, deeply rooted, and moderately volatile asset portfolio on Berachain, such as:

• WBERA / LSD (such as iBERA, stBGT, beraETH, etc.)
• WETH / LSD (weETH, ezETH, beraETH, etc.)
• WBTC / Psychedelics

Advantages:

• Reduce the risk of drastic price fluctuations.
• Enjoy better liquidity depth
• Stacking rewards at the same time: The staking rewards of LSD itself plus the BGT rewards from PoL.

Possible sources of income:

• Liquidity Mining (LP Rewards + PoL Rewards)
• Built-in yield for LSD
• Protocol Bribe Revenue Sharing

Risks and Precautions:

• The premium and discount issue between LSD tokens
• Validator's Commission and Profit Sharing System
• The balance between the amount of funds, Gas, and transaction fee costs

2. Stablecoin/Stablecoin Pair's "Low Volatility Strategy"

Core idea: Choose stablecoin pairs for the stablecoin pool, such as USDa/sUSDa, rUSD/HONEY, etc., to reduce impermanent loss risk.

Possible sources of income:

• PoL Incentives (BGT Emission + Protocol Bribe)
• Transaction fee income
• Additional rewards or airdrops for the parties involved

Risk and Precautions:

• The credit risk of stablecoins themselves
• The APR is relatively low
• Bribe is unstable

3. High-Risk Meme Coins / Emerging Token Pools "High APR Short-Term Strategy"

Core idea: Choose newly launched or high-profile Meme coins/emerging tokens and their trading pairs with WBERA, HONEY, BGT, or LSD.

Possible sources of income:

• PoL Rewards
• Extremely high APR or airdrop

Risks and Precautions:

• Price Volatility/Rug Risk
• Impermanent Loss
• Need to keep a close eye on the data

Conclusion: Strategies Require Dynamic Observation

The essence of the Berachain ecosystem under the PoL mechanism is essentially a "bribery competition between protocols." The best strategy is often "decentralization + dynamic adjustment":

• Some funds are allocated in stable LSD/blue-chip/stablecoin pools
• Small amounts of funds allocated to high-risk, high-volatility altcoins or Meme pools.
• Regularly track the APR of each pool, Validator Commission, and protocol Bribe trends to optimize mining profits in a timely manner.

Pay attention to safety: Be sure to focus on the risks of new protocol contracts, the rationality of token models, team backgrounds, etc. Although the high APY brought by PoL is tempting, the risks of rugs or contract vulnerabilities still exist in early ecological projects.