Bear Market Mining Strategies of Berachain: How to Achieve High Returns

Recently, the macroeconomic environment is filled with uncertainty, and the launch of the Bitcoin spot ETF has further tightened its connection with traditional financial markets. Against this backdrop, the price of Bitcoin has oscillated in the range of $82,000 to $88,000 for two months, with the secondary market lacking new narratives and the activity in the primary market also declining.

For investors, besides holding onto coins and waiting, using high-quality coins and stablecoins for Mining to earn passive income is also a good option. Among them, the PoL (Proof of Liquidity) mechanism launched by Berachain, a public chain with a built-in DeFi mechanism, is particularly noteworthy, as its annualized yield may even exceed 100%.

The Flywheel Effect of the PoL Mechanism

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

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

3. dApp Competition: To attract validators' BGT emissions, dApps enhance incentive measures, such as increasing native token rewards, thereby increasing liquidity depth.

4. User Delegation: Users can delegate the earned BGT to outstanding validators to enhance their block proposal weight, thus obtaining more sharing rewards. This incentivizes validators to continuously optimize the BGT distribution strategy, forming a virtuous cycle.

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

This mechanism encourages dApps, users, and validators to form collaborative relationships, effectively addressing the issues of insufficient liquidity and uneven asset distribution in traditional PoS.

Mining Strategy

1. Steady Layout: Core Blue Chips/LSD Combination

Core Idea: Choose relatively core, deep liquidity, and less volatile asset combinations on Berachain, such as:

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

Advantages:

• Reduce the risk of severe price fluctuations in coins
• Enjoy better liquidity depth
• Stacking Earnings: The staking rewards of LSD itself plus the BGT rewards from PoL.

Potential sources of income:

• Liquidity Mining (LP Rewards + PoL Rewards)
• LSD Built-in Earnings
• Protocol Bribery Profit Sharing

Risk Warning:

• Be aware of the potential premium or discount issues between LSD tokens.
• Differences in the commission and profit-sharing system of validators
• Balance the scale of investment with return rates and costs.

2. Low Volatility Strategy: Stablecoin to Stablecoin

Core idea: Choose trading pairs between stablecoins, such as USDa/sUSDa and rUSD/HONEY, to reduce impermanent loss.

Advantages:

• The assets themselves are relatively stable
• Possible additional benefits from protocol bribery

Potential Sources of Income:

• PoL Incentives (BGT Emission + Protocol Bribery)
• Trading Fee Earnings
• Possible additional rewards or airdrops from the protocol

Risk Warning:

• Pay attention to the credit risk and mechanism reliability of stablecoins
• The yield may be relatively low
• Protocol bribery may be unstable

3. High-Risk High-Return Strategy: Meme Coins/Emerging Tokens

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

Strategy: Short-term Mining and timely cashing out into blue chip assets or stablecoins.

Potential Sources of Revenue:

• Extremely high PoL rewards
• Additional token subsidies or airdrops provided by the protocol

Risk Warning:

• Price fluctuations are severe, and there may even be exit scams.
• The risk of impermanent loss is relatively high.
• Pay close attention to changes in relevant data.

Conclusion

Under the PoL mechanism of Berachain, the best strategy is often to adopt a diversified investment and dynamic adjustment approach:

1. A portion of the funds is allocated to stable LSD/blue-chip/stablecoin pools.
2. A small portion of funds to try high-risk, high-volatility altcoins or Meme pools.
3. Regularly track the APR of each pool, validator commissions, protocol bribes, and other data, and optimize the Mining strategy in a timely manner.

At the same time, be sure to pay attention to security and carefully assess factors such as the contract risks of the new protocol, the rationality of the token model, and the team's background. Although the high APY brought by PoL is quite attractive, the potential risks in early ecosystem projects should not be overlooked.