Berachain Launch

Overall, we believe that Berachain may pose a few issues in the initial few weeks. The chain allocated 6.9% to NFT holders, where some of these positions are now worth $10-15M USD - with some allocations to individual NFTs being worth $2-3M. Additionally, the chain allows for investors to stake with validators and earn rewards. Typically, this shouldn’t be an issue, however the chain raised a significant sum of capital and additionally allowed interested parties to deposit into the Boyco protocol, which restricts $3.1 billion of interested capital for 30-90 days. This could lead to there not being many liquid buyers of both ecosystem and native tokens.

Additionally, the market has evolved this cycle, moving away from complex DeFi and TVL-focused protocols in favor of trading functionality and fast chains. It is slightly worrying that Berachain is playing “last cycles capital games”. On the other hand, it could be interesting to see how a more DeFi focused chain could perform - given that we have not had many attempts over the past two years. Nevertheless, there might not be appetite for a chain that isn’t necessarily the fastest implementation, with the most tokens and volume to trade.

The team has done a good job attracting developers and protocols on the chain. However, it is still important in our opinion to be cautious in the first few weeks as many day-one launches will likely be basic forks and clones. Nevertheless, users can still earn BGT and BERA through enshrined applications like Beraswap (AMM) and Honeyswap (CDP), and projects like Infrared show potential. However, it's likely worth waiting to see what new protocols emerge after the initial launch period settles.