Introduction

Let's get this $BREAD

BakerDAO combines token economics, collateralized lending, leverage, and Proof-of-Liquidity into a single cohesive financial ecosystem. The $BREAD token features a mathematically-enforced upward price trajectory, backed by $BERA tokens.

This is a bonzi incubated by the core teams at Kodiak Finance and Yeet, and in collaboration with OlympusDAO.

Here's a quick explainer of Baker DAO:

• Users bake $BREAD by depositing $BERA

• Users can burn $BREAD, to redeem $BERA

• Users can take $BERA loans against their $BREAD at 99% LTV and access leverage

• There will be whitelisted pre-deposit vaults for users to deposit $BERA, and mint $BREAD at the same price as other depositors in same vault

• The baking and burning bonding curve ensures that $BREAD always rises against $BERA regardless of user behaviour

• The initial supply of $BREAD will be determined by how much $BERA is deposited in the pre-deposit vaults. The initial max cap of $BREAD will be 6.9 million. After that, the supply will be dynamic and the cap is adjusted each week.

Due to the nature of the mechanism, the max loss a participant can incur in $BERA by participating is 5.38%: from the 2.69% minting and burning fees respectively. If a participant is not the last user to ever mint $BREAD their max loss is less than 5.38%.