Understanding the BR coin Feedback Loop in Bedrock
Last week I explained Bedrock’s BR coin mechanism to a colleague. She listened closely and then asked a question I could not immediately answer. She wanted to know who decides which pools receive rewards if the people holding the most BR coin are already positioned in those pools.
Her question exposed a core tension in the design.
First large lockers receive BR coin which grants governance weight. Second those same large lockers naturally allocate capital to the pools that generate the strongest returns. Third BR coin governance allows them to direct emissions toward preferred pools. The result is straightforward. More rewards flow to the pools they already use. That increases returns which reinforces their position and their governance power.
Governance incentives and economic incentives align for the same group of participants. The mechanism works as designed and that is the challenging part.
The timing makes it more acute. Only 23 percent of total BR coin supply is currently circulating. Early lockers are accumulating governance weight before most of the holder base has tokens available to lock or to vote with. Key decisions are being made while many future participants are still absent.
I do not have a fully satisfying answer yet. The system is decentralized in structure but can be centralized in practice. It is permissionless yet path dependent. If the goal is to use BR coin to reward broad ecosystem growth then we need voters who are willing to direct emissions beyond their own positions. Without that we allow the current incentives to compound.
This is not criticism for its own sake. It is an open observation about design tradeoffs. Recognizing the loop is the first step to discussing solutions that balance yield incentives with long term distribution of governance.#bedrock
