We are taking Beluga to the next level. $BELUGA on Polygon will be 100% collateralized by usdc-dai LP tokens.
What is a collateralized token, and how does it work?
Token collateralization is when a token is backed by other assets, which are redeemable by the token holders. In Beluga’s case, the % of $BELUGA of the total supply can be burned to redeem the same % of the total collateralized amount. For example, if you have 120 $BELUGA (1% of the total supply) you will be able to redeem 1% of the collateral. Your $BELUGA will be burned out of the supply forever by doing this.
Collateral will be derived from protocol fees, which are liquidated for the highest-yielding usdc-dai LP tokens and then ‘put to work’ in a vault. Currently, the fee is set at 5% of performance fees.
Why Collateralization?
There are many benefits to doing this. First, it creates a price floor for $BELUGA. Furthermore, the LP tokens will continue to accrue trading fees as well as rewards, which will be compounded in our own vault. This will create an ever-rising price floor.
There will also be arbitrage opportunities. In the unlikely event that the fully diluted market cap goes below the collateralized amount, a situation arises where arbitrageurs can burn their $BELUGA for the underlying collateral, and purchase $BELUGA until the price and collateral reach parity. This will burn tokens out of the total supply forever and theoretically increase the price of $BELUGA.
More importantly, for long-term growth, it ensures that revenue from deposits is captured and retained in the protocol, which minimizes the risk of users farming and dumping.
Bridging $BELUGA to Polygon Network
Thanks to Anyswap, a bridge for $beluga is being created between BSC and Polygon. Users will be able to transfer their $BELUGA quickly between these chains. The $BELUGA on Polygon and BSC will be no different from one another, however, profit share will only be available on BSC and collateralization will only take place on Polygon.
What about BSC Beluga?
We will favor and follow the market activity but will continue to supply new vaults and strats for BSC. We are dedicated to increasing returns for BSC profit share stakers and Polygon collateral alike. High performance on either chain benefits all $BELUGA holders.
Final comments…
This is a part of a bigger plan to bring intrinsic value to the $BELUGA token. This is a slightly new concept and we are excited to implement something so different. Ultimately, the performance of our vaults will determine the success of this strategy.
BSC ✅
Polygon ✅
Arbitrum ❓❗
