DeFi

Berachain PoL and Honeypot FTO for enhanced liquidity

Published

6 months ago

27 July, 2024

Berachain PoL and Honeypot FTO for enhanced liquidity

Liquidity has been the backbone of DeFi (decentralized finance) since its inception. However, securing liquidity through locked capital is detrimental to DeFi in the long run. This realization served as the catalyst for the creation of Berachain’s Proof of Liquidity (PoL).

The traditional Proof-of-Stake (PoS) mechanism has some irreversible drawbacks. It gives an unfair advantage to network participants at the time of the TGE (Token Generation Event), paving the way for massive sell-offs. Furthermore, PoS leads to reduced liquidity for LP pools and transactions if the chain’s security were to be improved. Since PoS chains follow a single-token economic model, protocols do not have the flexibility to fund growth with their token holdings, as this can lead to a drop in the token price.

It is to address these challenges that Berachain relies on the PoL mechanism.

Enter Proof of Liquidity (PoL)

Much like PoS, PoL uses a gas token to incentivize validators to secure the network. However, PoL introduces an additional token called a governance token to incentivize liquidity providers and determine the potential reward for stakers who secure the network.

Berachain builds on PoL, introducing two tokens: $BERA – the native gas token, and $BGT – the governance token. Using PoL allows Berachain to attract liquidity by distributing $BGT as an incentive. Liquidity providers can contribute to the liquidity of BEX pools and earn $BGT (Bera Governance Token). $BGT holders then delegate their tokens to validators.

These validators then produce blocks proportional to the $BGT delegated to them. Delegators and validators are rewarded by Berachain for strengthening the network. Validators also have voting rights to decide on the inflation of $BGT.

What makes PoL so effective for Berachain?

Here’s how PoL solves the shortcomings of PoS:

Separate tokens: PoL separates the functionalities of the delegation token and the gas token ($BGT and $BERA in the case of Berachain), ensuring enhanced network security and sufficient liquidity.

Incentive Cash Collection: The only way to earn $BGT is by providing liquidity to BEX pools. This ensures sufficient liquidity for the pool, making trade settlements and on-chain transactions more efficient.

Inter-exchange market making: Fragmented liquidity is a major challenge in DeFi, leading to underutilization of available assets. PoL also allows larger exchanges to serve as primary market makers for emerging exchanges, facilitating the creation of an interconnected trading ecosystem within Berachain.

But there are some challenges to overcome…

Users participating in the PoL are required to lock up their assets. While this ensures liquidity at the beginning, it also means that these users will be eager to unlock their assets and sell them on the market shortly after the TGE to book profits.

Here, the liquidity strength depends on the willingness of these users to lock up their assets for a longer period. Since $BGT is a non-transferable token, these users have limited opportunities to generate more profits. Hence the reluctance to lock up their assets for a longer period.

With an insufficient number of tokens locked, a liquidity crisis is never too far away, creating a detrimental scenario for the entire Berachain ecosystem. And the solution to this problem had to come from within the ecosystem.

Enter FTO: The Driving Force Behind Honeypot’s Flywheel Model

Honeypot Finance’s FTO (Fair Token Offering) model designs actions following the same mechanism as Berachain’s PoL. While the end goal of both FTO and PoL is the same: to reduce selling pressure at or after TGEs, FTO is hyper-focused on creating liquidity through supplier volume rather than locked-in volume.

The Fair Token model offers:

100% Deep Liquidity: The FTO model ensures that all tokens are in the pool at launch, preventing market manipulation.

LP Token Creation: Instead of purchasing the actual token, investors purchase LP (liquidity provider) tokens at launch, creating liquid markets from day one.

Fair prices: The protocol and participants are treated equally and the allocation of LP tokens is split 50-50 between them, eliminating the risk of an unfair advantage for either party.

LP sale without price reduction: Protocols are allowed to sell LP tokens to raise funds for operational purposes. However, this sale has no impact on the token price.

Built on Berachain, Honeypot’s FTO is designed to accelerate activity and boost liquidity within the ecosystem.

Most importantly, FTO unlocks additional usage for $BGT by integrating it into Honeypot’s Flywheel model. Here’s how:

$BGT holders delegating to the BeeHive node (Honeypot Finance’s node) receive $HPOT (Honeypot’s governance token) as bribes.
The corruption mechanism is directly tied to voting rights, which strengthens incentives for the $HPOT and $Honey token pools.
In return, $HPOT holders can collect $BGT profits by participating in PoL mining.

PoL vs FTO: FTO acting as an accelerator for PoL

Users holding $HPOT, $Bera, or $Honey can invest in the $HPOT-$Honey-$Bera liquidity pool to earn $BGT. More importantly, they only need to hold one of these three tokens to be able to earn $BGT.

Together, $BGT and $HPOT power a lucrative revenue flywheel model, which leads to:

Significant increase in platform revenue and community node size
HPOT share buybacks surge, boosting its market value
Increased bribes and incentives for people with Parkinson’s disease, further increasing demand for the disease

Every time a user unlocks their tokens to withdraw liquidity, they lose their ability to generate income from $BGT issuance. Eventually, they can burn their $BGT holdings to acquire $BERA. The FTO model encourages more users to provide liquidity because it minimizes the probability of loss, with users getting back 50% of their invested tokens as LPs.

Final verdict

Once Honeypot gains prominence and helps emerging protocols attract liquidity through its Dreampad, the need for $BGT staking could increase significantly to fuel the network as well as the liquidity pool. Technically, FTO is meant to promote PoL, while addressing the problem of fragmented liquidity with efficient use of capital.

Proof of Liquidity (PoL) drives on-chain activity, speeding up the circulation of tokens. This allows PoL networks to achieve similar or even better economies of scale with fewer tokens compared to Proof of Stake (PoS) systems, where many tokens are locked up by validators, reducing the circulation speed.

Fair Token Offering (FTO) also improves token circulation by providing immediate liquidity after launch. This readily available liquidity facilitates the token’s exchange, further enhancing the PoL system’s ability to achieve substantial economies of scale. Together, these mechanisms complement each other, improving the overall functionality and sustainability of the DeFi ecosystem on Berachain.

Fuente

DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

Discover the exciting opportunities of the Rollblock (RBLK) presale today!

Website: https://presale.rollblock.io/

Social networks: https://linktr.ee/rollblockcasino

No spam, no lies, only insights. You can unsubscribe at any time.

Fuente

DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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