Berachain Co-Founder Regrets Selling Too Many BERA Tokens to VCs, Plans Buyback

Berachain’s co-founder, Smokey the Bera, has expressed regret over selling too many BERA tokens to venture capitalists (VCs) during the early stages of the project. In a recent appearance on the Unchain podcast, Smokey admitted that the team sold a large portion of the token supply during their seed and Series A funding rounds in 2022. At the time, the team didn’t anticipate the growth and success the project would later experience.

Reflecting on the decision, Smokey said, “If the team could start at ground zero, we probably would not have sold as much of our [token] supplies to VCs.” This regret stems from the fact that BERA tokens allocated to early investors and insiders led to concerns about tokenomics and insider trading following the Berachain mainnet launch in early February 2024. Traders expressed dissatisfaction with the airdrop allocations and the perceived unfair advantage early investors gained, particularly from the network’s staking mechanism.

In response to the backlash, Smokey stated that the Berachain team is working on a plan to buy back portions of the BERA supply from VCs in order to reduce the dilution felt by the broader Berachain community. He explained, “We totally sold too much to VCs, and our goal is now to make sure that we do right by people overtime in light of that.”

Despite the earlier issues, BERA has seen an uptick in price, rising 15% to $7.18 in the past 24 hours, although it’s still down 1% over the past week. Currently, the circulating supply of BERA stands at 107 million tokens, with a total supply of over 500 million. The token’s market cap is more than $750 million, and its fully diluted valuation has reached nearly $3.5 billion. In the past 24 hours, BERA’s daily trading volume surged by 29.7% to $325 million.

Berachain launched its mainnet and native token simultaneously on February 6, 2024. The token had a strong debut, peaking at nearly $15 on launch day. However, the price has since fallen by more than 50%, settling below its initial high.

Moving forward, Berachain aims to address the concerns about token distribution while working on long-term solutions to benefit the broader community. Smokey’s comments signal a commitment to rectifying the situation and ensuring the project’s future success.