Background:
Kodiak and Stargate have been in detailed discussions to strengthen our partnership and grow STG liquidity and volumes on Berachain, making Kodiak the STG hub on Berachain. Stargate DAO has demonstrated its commitment to the Berachain ecosystem by providing incentives to Boyco via HEP-1([Fast Track] HEP-1: Hydra Expansion Program) and the Stargate DAO has signalled interest to deploy capital on Berachain mainnet (https://snapshot.box/#/s:stgdao.eth/proposal/0x0b0b40c3617bf0849c85cfd5902a992e6c9029f551362c068b0aaa1fc2c3d744). This proposal seeks to deepen Stargate DAO’s commitment and presence to Berachain by establishing significant liquidity on Kodiak Finance.
Proposal:
Kodiak is the native liquidity platform for Berachain and serves as the leading decentralized exchange (DEX) by liquidity provider (LP) activity on Berachain, boasting $970m+ in total value locked (TVL) and just under $1b in lifetime trading volume. This deployment aims to position Kodiak as the primary STG hub on Berachain. Kodiak Finance proposes that Stargate DAO deploy a $5 million liquidity pool, structured as a 40:60 STG/HONEY Kodiak Island. Kodiak Islands are ERC20-wrapped Kodiak V3 positions specifically designed to “always in-range” for Berachain Proof of Liquidity. See docs for details: Islands | Kodiak Finance
Stargate aims to have this pool whitelisted for Berachain’s emissions (BGT) post-deployment. Should this proposal pass, the Stargate foundation will write up and submit a RFRV reward vault request on behalf of the Stargate DAO.
Deploying liquidity on Kodiak and submitting a request for BGT rewards will enable Stargate DAO to accumulate BGT and participate in Berachain’s governance. In order to ensure BGT flows to the STG/HONEY liquidity pool, Stargate DAO will allocate a portion of incentives requested via HEP-1 to bribing the Berachain validators for BGT.
Execution
Following the Stargate Treasury Consolidation process (StargateDAO Treasury Consolidation Proposal), the Stargate DAO can redirect LP to deploy the $5m STG/HONEY LP position. Until Kodiak’s TGE, 50% of this specific Island’s trading fees that is allocated for the Kodiak Treasury will be redirected as incentives for this Reward Vault. Post TGE, xKDK along with STG will be allocated to bribing validators. Post TGE, xKDK along with STG may be used to incentivize validators, subject to further determination.
BGT accumulated will be staked with validators to accrue rewards but more importantly, participate in Berachain’s DAO governance. Berachain is a Hydrachain with >$800m in liquidity locked in Stargate pools and hence it is essential that Stargate has a strong presence in Berachain governance discussions
The recommended allocation should come from the following DAO wallets:
| Asset and Amount | Assets deployed currently | Wallet address |
|---|---|---|
| 2m STG and 3m USDC | USDC in Stargate V2 pools and STG held in DAO wallets | 0x65bb797c2B9830d891D87288F029ed8dACc19705 |