$BREAD Rises

Up only

There are various actions that users can undertake in the protocol. Each of them has an associated fee. 70% of baking, burning, loan, and leverage fees increase the liquid backing of each circulating $BREAD.

• Every time someone bakes or burns $BREAD, the fee is added to the $BERA backing

• Every time someone opens a loan, the loan interest fee is added to the $BERA backing

  • Loans are time based, and if someone defaults on a loan, their $BREAD is burned

• If $BREAD is burned - decreasing the supply and reducing the backing - the fees from doing so are added to the backing which still increase the ratio of $BERA backing each circulating $BREAD

• Even when the supply increases, more $BREAD cannot come into circulation without fees being added to the backing that further improve the exchange rate of $BREAD to $BERA

• Please note that $BREAD is up-only against $BERA, not $USD

The source of yield is sustainable because it stems from: new participants minting, burning, initiating loans, and defaulting. LP incentives come from protocol revenue, as well as other incentives from Kodiak, Yeet, and Olympus.