🐻Kodiak x Berachain

Why Berachain?

Kodiak is the only DEX incubated by Berachain's Build-a-Bera accelerator program with the mandate of providing Berachain a suite of token launching, trading and liquidity provisioning solutions.

Berachain is a highly performant EVM-compatible layer one blockchain secured by its novel PoL consensus mechanism. For a traditional Delegated Proof of Stake (DPos) network, stakeholders and users must compromise between staking the network's governance token with the validator set to provide security or contributing liquidity to the network's decentralized applications. However, 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 the chain. As a result, PoL provides a solution that ensures that liquidity grows in tandem with staking.

The initial set of whitelisted applications starts with the chain-owned DEX (BEX), perpetual futures exchange (Berps), and lending platform (Bend), but will quickly expand to any smart contract deployed on the chain via governance. The Kodiak core team worked closely with the Berachain developer team to ensure that Kodiak’s Islands will be compatible with Berachain’s Proof of Liquidity (PoL) consensus mechanism.

Kodiak and BEX are not competitors, but meant to be complementary with each other. By design, BEX is a full-range AMM and does not offer nor does it plan on offering a concentrated liquidity solution. 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.

By leveraging our sophisticated back-end infrastructure, Kodiak Islands are automated vaults designed to dynamically adjust concentrated liquidity based on market conditions to optimize risk-adjusted returns with maximal in-range liquidity uptime. Kodiak also leverages liquidity on BEX when an Island needs to be rebalanced. Islands free users from the need for constant manual intervention while also securing Berachain with deep and in-range concentrated liquidity.