Kodiak Islands as Collateral

(Coming Thoon)

In Beraborrow, you can use your Kodiak LP positions as collateral to mint $NECT, unlocking liquidity while still earning yield on your staked assets. This dual-benefit feature allows users to leverage their LP holdings without losing out on the rewards typically earned from providing liquidity in Kodiak pools.

How Kodiak LP Positions Work as Collateral

When you deposit a Kodiak LP position into a Den, it’s automatically integrated into Beraborrow’s collateral management system. This means you can mint $NECT against the value of your LP tokens while still maintaining your position in the liquidity pool.

Here’s how it works:

1. Deposit Kodiak LP tokens: Users can deposit eligible Kodiak LP positions (for now we have $WBTC:$HONEY, $WETH:$HONEY and $WBTC:$WETH) into Beraborrow Dens.

2. Mint $NECT: Based on the collateralisation ratio, users can mint $NECT, unlocking liquidity while keeping their LP positions active within the protocol.

3. Retain LP Yield: Even while using your Kodiak LP tokens as collateral, the protocol ensures you continue to earn yield from your LP position. The assets in your Kodiak LP tokens are staked within Infrared vaults to accrue additional rewards.

Earning iBGT through Infrared

When Kodiak LP positions are staked as collateral in Beraborrow, the protocol deposits these assets into Infrared, where they continue to generate Proof of Liquidity (PoL) emissions thanks to $iBGT.

• As the Kodiak LP tokens are staked in Infrared, the $BGT rewards earned from these LP positions are automatically converted into $iBGT, a liquid version of the Berachain Governance Token ($BGT).

• $iBGT is then deposited back into your Den, where it compounds automatically. This means that as long as your Kodiak LP tokens are being used as collateral, you’ll not only retain your LP yield, but you’ll also benefit from additional $iBGT rewards, which further grow your collateral over time.

Maximising Yield with Auto-Compounding

To make this process even more efficient, Beraborrow’s Dens feature auto-compounding. Any $iBGT earned from your Kodiak LP position will automatically be restaked within Infrared, ensuring that your rewards continue to grow without the need for manual intervention. This allows your collateral to increase over time, providing a healthier collateralisation ratio and potentially enabling you to mint more $NECT.