@shadowvoyager1
The 17% inflation rate of BGT points in Berachain's testnet suggests a rapid increase in the supply of governance tokens, earned through liquidity provision, raising concerns about value dilution. Yet, a paradox emerges: high-frequency DEX arbitrage reduces airdrop weight. This stems from Berachain's Proof-of-Liquidity (PoL) mechanism, which prioritizes liquidity provision over trading activity. Airdrop eligibility likely rewards actions like long-term staking that enhance liquidity, not short-term arbitrage. While arbitrage exploits price differences across decentralized exchanges, it doesn't align with the liquidity-focused goals of the airdrop criteria. Thus, such trading may lower airdrop weight, emphasizing the need to understand Berachain's incentivized behaviors.
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