This is the B Bear equivalent article and is needed for BearGate and InfinityGate.

Henlo, please note everything written after this statement may, or may not be, psyops. This is written for education and entertainment purposes only and does not constitute financial advice. Most of this was written by Napzilla who has a lot of bear jpegs and edited by Janitooor who also has a lot of bear jpegs and is also a seed investor in Berachain. Remember anon, do your own psyops.

Everything that you have seen to date about Bong Bears and Berachain has been almost exclusively, organically originated from early supporters of the NFT collections. The marketing budget of the official team to date has been $0, outside of the cost of producing the art. As we highlighted in our BeraFi article and to put this into context, up until now there have been <1,000 holders of the Bong Bear NFTs, and probably <50 daily active users. Check out this dashboard to see the gradual growth of the bears. How the fuck has the Berachain team achieved such a scrappy and prolific marketing machine for free?

Is it luck or brilliance on the part of the Berachain team to recognize the enthusiasm of the community and step back and let them run free? Or has this situation only developed because they spent their marketing budget on play-doh for Smokey to consume? The truth is probably somewhere in between.

Before we deep dive into how things have unfolded in Berachain land, let’s look into some of the popular narratives around growth hacking and business development (BD) that were circulating last cycle. Let’s start with a popular meme from Web2 Silicon Valley “growth hacking” culture.

One of the stories from Web2, which Berachain’s guerilla approach bucks, is the idea of blitzscaling. According to a contribution to Messari by Jack Purdu about DAOs and Blitzscaling, this is a practice popularized by LinkedIn founder Reid Hoffman.

Blitzscaling is a strategy and set of techniques for driving and managing extremely rapid growth that prioritize speed over efficiency in an environment of uncertainty. Put another way, it’s an accelerant that allows your company to grow at a furious pace that knocks the competition out of the water.

In the Messari article, Purdu asserts that DAOs should think about doing the same thing that traditional firms do. The concept boils down to: use a stack of cash from VCs to grow bigger and faster than any competitors can catch up to. Throw money at anything and everything and don’t worry about what catches on and what doesn’t - it’s a shock and awe campaign. On the surface it makes sense, but due to some of the particularities of DAOs, this hasn’t exactly played out. A big reason is due to how undiversified DAO treasuries have been (with a few key exceptions). This concept is analyzed in this thread from Bond Protocol, a protocol that helps projects and DAOs to diversify their treasury via more sustainable bonding mechanisms.

The problem for most DAOs is that the vast majority of their treasuries are denominated in their native governance token. This means that their operating budgets are severely impacted during bear markets, therefore making blitzscaling an unsustainable approach. For the most part, this is one of the reasons that there haven’t been many Web3 projects that have successfully executed blitzscaling.

Outside of blitzscaling, what other growth strategies have Web3 organizations been implementing? We will look at two: Foundation grants and high emissions via farming incentives. Look at most any L1 and you’ll find one or both of these in action. Let’s look a little more closely at two networks that are comparable to Berachain:

• EVMOS - Another attempt at EVM (Ethereum Virtual Machine) x Cosmos)

• Optimism - An L2 that implements optimistic rollup technology, allowing the network to leverage the security properties of the underlying L1 but whilst being able to offer cheaper transactions to users.

The Sad Tale of EVMOS

Above, we see a drastic chart that paints a clear picture of the EVMOS Total Value Locked (TVL). A new chain launches and offers very high rewards to people who deposit funds onto the chain, causing a huge spike in TVL. Anons with capital were heavily incentivized to deposit their liquidity to the chain in exchange for network tokens, often known as farming. You may have heard the phrase “farm and dump.” Well my friend, this image is that strategy visualized. Sometime around August, you can see exactly where the incentives stopped… and pop went the weasel. The users were done farming and then took a big ol dump. Mercenary capital - high-rollers with money willing to go wherever there are profits to be made - were done with their EVMOS farming rotation, and took their money and probably profits elsewhere.

Around November there was another round of incentives, and we can observe the exact same cycle. In our article “Berachain, Cults, and the Dawn of The Honey Jar” we describe this phenomenon as PvP in a ghost town. Mercenary capital comes in and extracts all that they can out of a new ecosystem before leaving without a trace. This provides no real value to anyone but themselves, and truly hurts the chain by preventing organic growth and by creating bagholders out of those who entered the space with good intentions. The issue here isn’t necessarily that this game is played, the issue is that it is often the only game in town - hence PvP in Ghost Town.

You can see these results reflected in the downonly action of the EVMOS governance token below:

So to answer the question “How could EVMOS come back?” Well, let’s not worry ourselves with that, anon. We wouldn’t wanna hurt any feelings. Instead, let’s look at Optimism before speculating on Berachain a bit.

The Optimism of Optimism

As the Condom’s chart shows, a similar situation played out with Optimism. Farming incentives attracted capital and TVL went up. Then those incentives dried up and the farmers dumped, causing TVL to fall off hard.

We’re not here to shit on Optimism. We know they have been performing relatively better these past few pamps. That’s the the point. For the most part, whenever farming incentives dry up we can see a massive cliff in TVL and daily active wallets. Perhaps one of the exceptions to this model has been Velodrome. To date, Velodrome has been one of the models that has fared remarkably well. In part, this is because they pass on all the rewards/grants which they got from Optimism in order to amplify the effects of their tokens. This adds to the flywheel rather than just being a cost that goes to early mercenary users who do not have aligned mid-to-long term incentives with either the project or the underlying L1. 

The Velodrome model itself has been replicated enough times for us to see that the model itself is sound, as in many of those cases there have been no grant-boosted funds from a foundation or similar entity. But we can say in this specific case that grant funds did help to accelerate and amplify the effect. Can the substantial trading volume that The Honey Jar’s article collections have been bringing to Optimism be the ecosystem’s saving grace? Let’s just say we aren’t too optimistic.

Recap on The Fat BERA Thesis

Let’s take a little detour back to one of our earlier articles. In “Berachain, Cults, and the Dawn of The Honey Jar,” janitooor proposed the Fat BERA Thesis as a more fitting thesis for the innovations happening within Berachain than either Joel Monegro’s 2016 “Fat Protocols” thesis (the majority of value created is captured by protocols, not apps) or Zee Primes’ 2023 “Fat App Thesis” (Most value accrues to an app (or a few apps) that provides a broad range of products). The Fat BERA Thesis asserts that “Protocols with endogenous apps (AMMs, perps, stables, borrow/lending) which capture value and share with exogenous protocols, apps, and the cult (other stakeholders) will dominate DeFi”. Let’s break this dense sentence out:

• Protocols with endogenous apps (AMMs, perps, stables, borrow/lending)

  • Imagine if GMX, USDC/DAI/FRAX and AAVE were all built into the protocol itself (endogenous)

• which capture value and share with exogenous protocols, apps

  • Imagine portions of fees from those protocol-owned (endogenous) apps were then shared with projects building on top of the chain (exogenous) such as all The Honey Jar’s partners

• and the cult (other stakeholders)

  • Imagine portions of those rewards were shared with early adopters of these projects

• will dominate DeFi’

  • Imagine the concept of sticky liquidity. Come for the farming, stay when you realize that it’s sustainable and there is more than just PvP knife fighting on the menu

This is the essence of what Smokey means when he says that Berachain will be the home of “Sticky Liquidity.” Make sure to check out the above article to read about the analogy of Berachain as the 16th century Kingdom of Portugal.

But let's loop back around to Velodrome and Optimism. Imagine if Velodrome’s supplementary value flow came through activities at the base layer of Optimism rather than as a grant from the Foundation. Even with the latest news that Coinbase will be using Optimism as a base layer, Optimism will be beholden to Coinbases good will to pass on % of value through the platform to them…

This is the heart of the Fat BERA Thesis: a model where portions of endogenous (base layer) app rewards flow through to the exogenous apps (Velodrome in this example) gaining traction on the baselayer, therefore amplifying both in a win-and-help-win flywheel that starts at the very core of the L1. Not only this, but this exogenous project would be getting diversified capital streams which would diversify their treasury or allow them to reward their users in diverse token flows. This all lays the foundations for a much wider diversity of games and aligned incentives - from day dot.

Dysfunctional DeFi and the Rise of Berachain

As Smokey F. Kennedy stated on MarketCapping: “Ask not what you can do for your chain, but ask what your chain can do for you.” Not only did he completely flip the original quote (typical Canadian), but what does it even mean? None of the following Berachain details have been publicly announced yet, so it is all prone to total change, but we can extrapolate and create something from non-existence to imagine what he MIGHT mean.

We imagine a situation where the following is happening within the Berachain ecosystem:

• The L1 has some of the most popular types of applications at the protocol layer (swaps, a stablecoin, perps, etc.)

• Some proceeds from these apps flow to early supporters who are involved in governance, early app development, etc.

• This process allows apps to diversify their treasuries and allows some of that value to flow through to their users (think Optimism’s grant model)

The culmination of all of this is STICKY, honey-like liquidity. But that’s not all! From day one, there will be a whole host of interesting dynamics, games, protocols, and projects for excited users to play with. It’s in this context that it starts to mek sense that big brains such as 0xSami_, Devon Bear have been attracted to contribute to Berachain. Berabullish.

In fact, in the current prehistory of Berachain, we can already see the bera community’s degenerate tendencies coming through strong, as featured in THJ’s previous articles. Since we started writing these articles, Berachain-related projects have raised >$1M via premints, NFT drops, etc - and all before Berachain has released any public code, let alone a testnet.

All of this is what we call HoneyBlitzing, or Operation Bear Hug. It turns the foundation grant and VC burn blitzscaling strategy on its head, and instead focuses on the age-old lessons of treating your early users like gold, prioritizing word of mouth, and letting the rest follow. It’s within this context that we can see what Smokey means when he says he is open sourcing the Berachain business development. In our opinion, this type of a business development approach has yet to be seen in our industry at the Layer 1 level and will chalk up yet another 0 to 1 innovation for the Beraverse. The play-doh eater may just be getting away with it.

To bring this all to a close, let’s look at the historical eras of innovation and growth in crypto and make a prediction of the next era:

• Bitcoin - Genesis of cryptocurrencies

• Color Coins - The OG Ordinals (look it up), time doesn’t repeat but it rhymes

• Bitcoin forks - Dogecoin is the OG here

• Ethereum - Launch of the premier degen L1

• ICOs - Ethereum was initially a platform for launching tokens via Initial Coin Offerings (probably 100% were securities)

• Food Coins - Coins like YAM and TENDIES are a prelude to DeFi Summer

• DeFi Summer - Explosion of DeFi protocols

• NFTs - The notorious boom of good (and bad) jpegs

• Fat BERA Era - The Bera Era is soon upon us and it’s got it all Food, DeFi, NFTs and more. All praise be to Berallah

The truth is - nobody has seen what an ecosystem looks like when it launches with institutional capital, enough surface area for degens to degen, sticky liquidity for wider ecosystem benefits, and NFTs as the face of the space’s culture all from day one.

What we do know is that the Berachain rollout has not been blitzscaling, nor has it been foundation-incentivized farming (impossible in any case due to non-existence), but instead a third stranger thing - HoneyBlitzing. We may observe that some of the emergent properties in the bera space are similar to the early years of Burning Man or the types of situations described as Temporary Autonomous Zones by Hakim Bey. An effort that started with a focus on fundamentals and infrastructure turns into something completely different when the early freaks show up and make it their own. But in this case, these early bera freaks are able to utilize what we describe in our piece on Berachain and Cults as the The Holy Trinity of Crypto: (blockchains, wallets) + Cryptography (signing, encryption) + Digital Networks (the internet, digital media) propelling us across dimensions, fusing meatspace with cyberspace into cypherspace allowing the beras to do it on the internet instead of naked in the desert on six tabs of acid.