Terms and Conditions
Sourdough Ventures IBC
These Terms of Use, together with any documents and additional terms they expressly incorporate (collectively, these "Terms"), are entered into between Baker DAO ("Baker", "we", "our" or "us") and the person making use of Baker's services, including, but not limited to, the use of this website and smart contracts (hereinafter referred to as the "User", "you" or "your"). These Terms constitute a binding legal agreement between Baker and the User following such User's acceptance of such Terms.
Within these Terms, words of any gender shall be held and construed to include any other gender, and words in the singular number shall be held and construed to include the plural unless the context otherwise requires.
These Terms govern your access to and use of Baker's Protocol and Services. You must read the Terms carefully. By accessing, browsing or otherwise using Baker's Protocol or Services, or by acknowledging agreement to the Terms, you agree that you have read, understood and accepted all of the Terms and our Privacy Policy (the "Privacy Policy"), which is incorporated by reference into the Terms.
By accessing or using Baker's Protocol or Services, the User accepts and agrees to be bound by and comply with these Terms, including the mandatory arbitration provision in Section 18. If the User does not agree to these Terms, such User should not access or use Baker's Protocol or Services.
The User must be able to form a legally binding contract online either as an individual or on behalf of a company, as outlined in Section 2.
Baker appeals to the User to carefully review the disclosures and disclaimers set forth in Section 14 in their entirety before using any software developed by Baker. Section 14 provides important details about the legal obligations associated with the User's use of the Baker open-source software. By accessing or using Baker's Protocol or Services, the User agrees that Baker does not provide execution or clearing services of any kind and is not responsible for executing or clearing transactions automated through the Baker open-source software.
KEY DEFINITIONS
For the purpose of these Terms, the following capitalized terms shall have the following meanings:
"Affiliate" means, with respect to a party to these Terms, any legal entity that, directly or indirectly controls, is controlled by, or is under common control with Baker.
"Applicable Law" means any domestic or foreign law, rule, statute, regulation, by-law, order, protocol, code, decree, or other directive, requirement or guideline, published or in force which applies to or is otherwise intended to govern or regulate any person, property, transaction, activity, event or other matter, including any rule, order, judgment, directive or other requirement or guideline issued by any Governmental Authority having jurisdiction over Baker, the User, the Protocol or the Services, or as otherwise duly enacted, enforceable by law, the common law or equity.
"BREAD" means the token of the Baker DAO Protocol that may be used for the following purposes: i) baking and burning; ii) borrowing BERA Tokens by providing BREAD as collateral; iii) leverage; and iv) staking purposes to receive rewards.
"HONEY" means the USD-pegged stablecoin used within the Protocol.
“OHM” means the algorithmic stablecoin used within the Protocol.
"Protocol" means the Baker website, smart contracts, and associated services that enable the creation, burning, borrowing, leveraging, and staking.
"Services" means the Products offered by Baker as accessible through the Protocol.
"Product" means any product offered through the Services and available in or through the Protocol, including but not limited to Baker Vaults and liquidity pools.
PROTOCOL OVERVIEW
The Protocol enables:
Minting and burning of BREAD;
Borrowing BERA Tokens by using BREAD as collateral;
Use the borrowed BERA Tokens to mint or purchase more BREAD;
Repeat the process outlined in point (iii), referred to as Looping;
Open one-click leverage positions;
Liquidity Provision in the Kodiak Island, by staking the LP Token to earn rewards;
Earn farming rewards by staking the LP Token into Kodiak Sweetened Island;
Auto TWAP functionality that enables any ERC-20 token to be added and contribute to the backing of BREAD;
Minting iBREAD Token by staking BREAD;
Pooling of deposited assets to mint BREAD;
Allows users to lock any ERC-20 token within the BREAD contract for a pre-determined fee of 1% that contributes to the backing of BREAD.
The Protocol operates through smart contracts deployed on the blockchain and requires no permission or authorization from Baker DAO to use.
ELIGIBILITY
The following are conditions of access to the Portal, and each time you access the Portal, the
User represents and warrants to us that:
The User is an individual that is 18 years of age or older, capable of forming a binding contract with us, and under no legal impediment or incapability;
If the User is acting on behalf of or through a company; the User is an authorised representative of the company and has the authority from that company to access the Portal and form a binding agreement with us on behalf of that company;
The User is not identified as a "Specially Designated National" by the US Office of Foreign Assets Control or otherwise subject to any sanctions or restrictions which may affect our ability to provide the User with our Services;
The User has the full power and authority to agree to these Terms and to use any Service offered by Baker through the Portal;
The User has read these Terms prior to using any Service, and that you are solely responsible for your trading or non-trading actions and have had the opportunity to take any legal, financial, accounting or other advice that you deem appropriate prior to accessing the Portal or using any of the Services;
The User will only utilise legally obtained digital assets that belong to the User, and that the User has full legal and beneficial title to any such assets at the time the User utilises them;
The User is not located in, or a resident of, any Restricted Territory (as defined below) and has not used any technical means (including a VPN) to misrepresent its geographical location to access the Portal from any Restricted Territory; and
The User is acting for its own account as principal and not as trustee, agent or otherwise on behalf of any other persons.
Your access to the Portal and any Services may be restricted based on your jurisdiction or geographical location. You must not use the Product or the Portal if you are located in or a citizen or resident of any state, country, territory, or other jurisdiction in which use of the Portal or the Services would be illegal or otherwise violate any applicable law (a “Restricted Territory”).
The fact that the Portal is accessible in a Restricted Territory or that the Portal allows the use of the official language of a Restricted Territory, or a language commonly used in a Restricted Territory must not be construed as a license to use the Portal in such a Restricted Territory.
We unconditionally reserve the right to restrict access to any Restricted Territory and may implement technical controls to prevent access to the Portal or any Services from any Restricted Territory. No services are offered to persons or entities who reside in, are citizens of, are located in, are incorporated in, or have a registered office in any Restricted Territory, which include, without limitation the following: (a) Belarus, Cuba, Democratic People’s Republic of Korea (DPRK), Democratic Republic of Congo, Iran, Lebanon, Libya, Mali, Myanmar, Nicaragua, Russia, Somalia, South Sudan, Sudan, Syria, the following regions of Ukraine: Crimea, Donetsk and Luhansk, or any other country or region that is the subject of comprehensive country-wide or region-wide or economic sanctions by the Financial Action Task Force, United Nations, United States of America, the European Union or the United Kingdom; and (b) United States of America, the United Kingdom, Canada, and the People’s Republic of China.
If you are a resident or citizen of or otherwise are located or incorporated in, or have a registered office in any Restricted Territory, do not use Baker’s Portal or Services or attempt to use a virtual private network (VPN) or other technology to circumvent the restrictions set forth herein. Use of a VPN to access Baker’s Portal or Services is expressly prohibited.
You acknowledge and agree that you will not use a VPN or similar technology to access or use Baker’s Portal or Services in any way. We reserve the right to restrict or discontinue your access to and use of the Portal and Services if we know or have reason to suspect you are using a VPN for such access or use.
MODIFICATIONS TO THESE TERMS
In our sole discretion, we reserve the right to modify these Terms from time to time. If modifications are made, Baker will provide the User with notice of such changes by providing a notice through our Services or updating the date at the top of these Terms.
Unless we say otherwise in our notice, all such modifications are effective immediately, and your continued use of our Services after we provide such notice will be construed as a consensual confirmation of the notified changes.
Where the User does not agree with the modified Terms, such User is to cease from using Baker’s Services at once.
SERVICES
Protocol Overview
Baker DAO is a decentralized, permissionless protocol that combines token economics, collateralized lending, leverage, and Proof-of-Liquidity into a single cohesive financial ecosystem. The Protocol operates through smart contracts deployed on the blockchain and requires no authorization from Baker DAO for use. The User acknowledges that Baker does not custody, control, or have access to User funds at any time.
Minting and Burning Services
The Protocol enables Users to mint and burn BREAD Token(s) through the smart contract under the following conditions:
Minting Process (referred to as ‘Baking’)
Users may mint BREAD by depositing BERA stablecoins into the protocol’s smart contract
A fee of 2.69% is applied to each minting transaction, increasing the BERA backing per circulating unit of BREAD
A baking cap is determined each week. If the cap was reached in the previous week, the baking cap increases by 50%, allowing for new BREAD minting. If the cap was not reached, then it remains unchanged
Users receive BREAD minus fees
The quantity of tokens received is determined by a 2.69% underlying fee
Burning Process:
Users may burn BREAD to redeem BERA at any time
A fee of 2.69% is applied to each redemption
The fees are distributed to the BERA backing, PoL bribes, and treasury in the same ratio as baking fees
Trading Services
The Protocol provides Loans, Leverage and Staking functionalities:
Loans:
Users can borrow up to 99% of their BREAD’s value in BERA
Interest rates are calculated on a linear scale with an origination fee of 0.1%, and an APR of 6.8%. Interest is collected up front, upon initiation of a loan
If a loan defaults, then the BREAD collateral is burned
Since loans are over-collateralised, burning the collateral causes the ratio of BERA per BREAD to increase
BREAD collateral from liquidated positions are burned collectively, every day, at 00:00 UTC
Leverage:
Users can borrow BERA against their BREAD, use the borrowed BERA to mint or buy more BREAD, and repeat this process called looping
Baker DAO interface facilitates looping in one transaction, making it quick and simple to open and unwind leveraged positions
The BREAD minting fee is discounted from 2.69% to 1.25% when opening leveraged positions
If a leverage position defaults, then the BREAD collateral is burned, causing the ratio of BERA per BREAD to increase. BREAD collateral from liquidated positions are burned collectively, every day, at 00:00 UTC.
Liquidity providers receive LP tokens representing their share of the pool
LP tokens entitle holders to a proportional share of trading fees
Liquidity can be withdrawn by burning LP tokens
Staking:
Users provide liquidity in the Kodiak Island, and can stake the LP token to earn rewards
Kodiak Islands are ERC-20 wrapped Kodiak V3 positions that enable simplified liquidity provision through a fungible token interface
When users add liquidity to an Island, they receive Kodiak Island tokens representing their proportional ownership of the underlying Kodiak V3 position
Secondary Services
The Protocol enables various functionalities through the following mechanisms:
Auto TWAP:
Allows for any ERC-20 token to be added and contribute to the backing of BREAD
A fixed bounty in BERA terms is requested in order to sweep all the ERC-20 balances in the Bread contract
As balances grow, arbitrageurs sweep the balances and pay BREAD with BERA, which is added to the backing
This functionality enables BREAD to receive rewards and revenues in the form of HONEY, OHM, or other ERC-20 tokens to grow its backing
iBREAD
Allows for the creation of iBREAD Token by staking BREAD
iBREAD has an elastic supply;
Main functionality of iBREAD rests within GameFi
Pooled Baking
Allows for master baker-authorised contracts can pool deposits to mint BREAD
Enables all users to get the same price
Can be used as a fundraising mechanism
Token Locker
Allows users to lock any ERC-20 token within the BREAD contract for a 1% fee that contributes to BREAD’s backing
In the future, Panda Factory tokens may lock LP tokens of graduated tokens using this mechanism
Gas Fees and Transaction Costs
Users are responsible for all blockchain transaction fees required to interact with the Protocol. Baker DAO has no control over and does not receive any portion of these network fees.
Protocol Restrictions
Baker DAO reserves the right to restrict access to the Protocol interface in certain jurisdictions. However, as an open-source protocol, the underlying smart contracts remain accessible and permissionless.
Conditions and Restrictions
Baker DAO may, at any time and in its sole discretion, restrict access to the Protocol interface or impose conditions upon its use, with or without prior notice. The Protocol smart contracts, being immutable and decentralized, will continue to function regardless of interface availability.
No Broker, Legal or Fiduciary Relationship
Baker DAO is not your broker, lawyer, intermediary, agent, or advisor and has no fiduciary relationship or obligation to you regarding any decisions or activities that you effect when using the Protocol. No communication or information provided by Baker DAO is intended as, or should be construed as, advice.
PROTOCOL RISKS
Smart Contract Risk
The Protocol smart contracts may contain bugs or vulnerabilities
Smart contracts are immutable once deployed
You acknowledge and accept all risks associated with smart contract usage
Financial Risk
Asset prices are volatile and subject to market conditions
No guarantee of profit or return on investment
PROTOCOL CONSTRAINTS
Transaction Ordering
All protocol operations execute in the order they are confirmed on the blockchain. Users acknowledge that transaction timing and network conditions may affect execution outcomes.
Price Limitations
The Protocol enforces the dynamic baking cap and master baker. Users acknowledge that attempting transactions that would in certain instances not fall under imposed whitelists by the master baker will fail.
Technical Requirements
Users must maintain sufficient blockchain network tokens to cover transaction fees and must interact with the Protocol through properly formatted transaction calls. Users acknowledge that incorrect transaction formatting may result in failure or unintended outcomes.
CYBERSECURITY RISKS
SMART CONTRACT SECURITY
The Protocol's smart contracts may contain vulnerabilities, bugs, or other issues despite security audits and testing. Users acknowledge that such issues could result in the loss of functionality, assets, or other value. Smart contracts are immutable once deployed, and Baker DAO cannot modify or update them.
PRIVATE KEY SECURITY
Users are solely responsible for securing the private keys associated with their blockchain addresses. Loss or compromise of private keys will permanently and irreversibly deny access to a User's assets and positions within the Protocol. Baker DAO cannot restore access to or recover any assets controlled by lost private keys.
NETWORK SECURITY
The Protocol operates on Berachain that may be subject to various attacks, including but not limited to:
Network congestion or denial of service conditions
Consensus failures or chain reorganizations
Block producer collusion or malicious behavior
Network forks or other technical changes Users acknowledge that such events may affect transaction execution, asset prices, or Protocol functionality.
ORACLE SECURITY
The Protocol may rely on external data sources and oracle systems for asset price information and other critical data. These systems may experience technical failures, manipulation, or other issues that could affect Protocol operations. Users acknowledge that oracle malfunctions could result in incorrect asset valuations or Protocol actions.
INTERFACE SECURITY
While Baker DAO implements security measures in its user interface, Users acknowledge that:
No internet-based system is entirely secure
Communications may be intercepted or modified
Malicious actors may attempt to trick Users into approving harmful transactions
Frontend interfaces may experience technical issues or downtime
TRANSACTION SECURITY
Users acknowledge that blockchain transactions are:
Irreversible once confirmed
Public and visible to all network participants
Subject to potential front-running or manipulation
Dependent on network conditions for confirmation time and fees
DIGITAL ASSET RISKS
VALUE VOLATILITY
Digital assets, including BREAD, and LP tokens, may experience significant price volatility. Users acknowledge that asset values can change rapidly and substantially, potentially resulting in partial or total loss of value. Past performance does not indicate future results.
LIQUIDITY RISKS
Users acknowledge that digital asset markets may experience:
Insufficient trading volume or liquidity
Wide bid-ask spreads
Significant price impact from large trades
Temporary or permanent loss of liquidity
Inability to exit positions at desired prices
TECHNICAL RISKS
Digital assets are subject to technical risks including:
Smart contract bugs or vulnerabilities
Blockchain network failures or congestion
Oracle malfunctions or manipulations
Protocol parameter changes through governance
Integration failures with external systems
REGULATORY RISKS
The regulatory status of digital assets is evolving and uncertain. Users acknowledge that regulatory changes may:
Affect the legality or permissibility of certain assets
Impact the ability to trade or transfer assets
Require identity verification or reporting
Result in Protocol modifications or restrictions
Lead to the termination of certain Protocol features
MARKET OPERATION RISKS
Users acknowledge that digital asset markets may be subject to:
Market manipulation or abuse
Insider trading or information asymmetry
Coordinated trading behavior
Technical trading issues or errors
Sudden changes in market conditions
SYSTEMIC RISKS
The interconnected nature of digital asset protocols creates systemic risks:
Cascading failures across protocols
Contagion from external market events
Dependencies on third-party services
Network-wide technical issues
Market-wide liquidity crises
Users acknowledge that the risks described in Sections 5 and 6 are not exhaustive, and additional risks may exist or emerge. Users should carefully evaluate their financial situation and risk tolerance before using the Protocol.
LIMITATION OF LIABILITY
MAXIMUM LIABILITY LIMIT
To the maximum extent permitted by applicable law, in no event shall Baker DAO, its affiliates, or any of their respective officers, directors, agents, employees, or representatives (collectively, the "Indemnified Parties") be liable for any indirect, punitive, incidental, special, consequential, or exemplary damages, including without limitation:
Loss of profits, revenue, data, use, goodwill, or other intangible losses
Damages relating to any loss of access to or use of the Protocol
Damages relating to any conduct or content of any third party using the Protocol
Damages relating to any communication failures or unauthorized access to user accounts
Damages relating to any bugs, viruses, or other malicious code that may be transmitted through the Protocol
Damages relating to any modification, suspension, or discontinuation of the Protocol
Damages relating to the accuracy, reliability, or completeness of any Protocol data or information
This limitation applies regardless of the legal theory of liability, whether based on contract, tort, negligence, strict liability, or any other basis, and even if the Indemnified Parties have been advised of the possibility of such damages.
PROTOCOL-SPECIFIC LIMITATIONS
The Indemnified Parties shall not be liable for any damages or losses resulting from:
Smart contract vulnerabilities, bugs, or technical failures
Oracle malfunctions or price feed inaccuracies
Governance decisions or protocol parameter changes
Market conditions or trading activity
Regulatory changes or compliance requirements
Network congestion or transaction failures
Loss or compromise of private keys
Actions of other Protocol users or market participants
AGGREGATE LIABILITY CAP
In jurisdictions where the exclusion or limitation of liability for consequential or incidental damages is not permitted, the Indemnified Parties' liability shall be limited to the maximum extent permitted by law, and under no circumstances shall exceed the amount paid by you to Baker DAO in the past twelve months, if any.
ESSENTIAL PURPOSE
You acknowledge that this limitation of liability is an essential element of the agreement between you and Baker DAO and that the Protocol would not be provided without such limitations.
GOVERNING LAW
These Terms shall be governed by and construed in accordance with the laws of the Republic of Panama, without regard to its conflict of law provisions.
INITIAL DISPUTE RESOLUTION
Prior to initiating any formal dispute resolution process, Users agree to first contact Baker DAO directly to seek an informal resolution. Users must send a written notice describing the dispute to masterbaker@bakerdao.io and allow thirty (30) days for Baker DAO to respond before proceeding with further dispute resolution measures.
BINDING ARBITRATION
If a dispute cannot be resolved informally, all disputes arising out of or relating to these Terms or the use of the Protocol shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules. The arbitration proceedings shall be conducted in English.
ARBITRATION PROCEDURES
The arbitration shall be conducted:
By a single arbitrator, unless the amount in controversy exceeds $1,000,000
In English language
In Panama City, Panama, unless otherwise agreed by both parties
In accordance with the ICC Rules of Arbitration
On a confidential basis
CLASS ACTION WAIVER
To the maximum extent permitted by applicable law, you hereby waive any right to participate in class action lawsuits or class-wide arbitration of any claims against Baker DAO.
INDIVIDUAL CAPACITY
Any proceedings to resolve or litigate any dispute in any forum will be conducted solely on an individual basis. Neither you nor Baker DAO will seek to have any dispute heard as a class action or in any other proceeding in which either party acts or proposes to act in a representative capacity.
INJUNCTIVE RELIEF
Notwithstanding the foregoing, Baker DAO may seek injunctive relief or other urgent legal remedies in any jurisdiction to enforce intellectual property rights or prevent imminent harm to the Protocol or its users.
TIME LIMITATION
Any claim or dispute under these Terms must be filed within one (1) year after such claim or dispute arose, or the claim shall be forever barred.
COSTS OF ARBITRATION
The costs of arbitration, including administrative and arbitrator fees, shall be shared equally by the parties, unless the arbitration award provides otherwise. Each party shall bear the cost of its own legal fees unless the arbitrator determines that one party shall bear the legal fees of both parties.
SEVERABILITY
If any portion of this dispute resolution section is found to be unenforceable or unlawful, such portion shall be severed from these Terms, and the remainder of this section shall continue to be fully valid and enforceable.
ELECTRONIC NOTICES
The User consents to receive all communications, agreements, documents, receipts, notices, and disclosures electronically (collectively, our "Communications") that Baker provides in connection with these Terms or any Services. The User agrees that Baker may provide Communications to him by posting them on the Portal or by emailing them to the User at the email address provided in connection with the User's use of the Services if any. The User should maintain copies of Baker’s Communications by printing a paper copy or saving an electronic copy.
CONTACT US
Please send your feedback, comments, or requests for technical support to masterbaker@bakerdao.io
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