Unlock Liquidity, Berachain ecosystem protocol Boyco upgraded again

On September 26, Berachain officially announced the launch of the Request For Broposal (RFB) incentive program. The program aims to provide Liquidity support for projects and Testnet developers in the Berachain ecosystem, helping to bootstrap these projects.

According to the announcement, projects deployed on the Berachain testnet can apply to participate in the RFB program before October 9th and have the opportunity to join the Boyco project. The Boyco project, by connecting to the Royco Protocol, allows the project party to directly access Liquidity support from Berachain, enabling them to focus more on project development and community operations. This incentive mechanism provides developers with a great opportunity to achieve faster ecosystem construction.

01 The main challenges facing DeFi

In the field of Decentralized Finance, many projects face daunting challenges, which often constrain their development potential.

First of all, the cold start problem is still a major obstacle for most emerging applications. Many Decentralized Finance applications are unable to attract users to trade due to a lack of Liquidity when they first go online, making it difficult for projects to gain initial recognition.

In addition, the centralization issue of Liquidity supply is quite prominent. Many applications often rely on a few high-net-worth investors and market makers (MM) to provide Liquidity, which not only exacerbates the inequality of Liquidity, but also greatly reduces the participation opportunities for ordinary users.

Secondly, many applications have adopted complex points and reward mechanisms to incentivize users, but the transparency of these mechanisms is insufficient. Users often find it difficult to understand the actual value of the points, leading to a gap between expectations and actual benefits, thus affecting the trust of users.

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Finally, high Money Laundering and network congestion issues still exist on many on-chain, making microtransaction no longer economical, thus limiting widespread user participation.

In the face of challenges, Berachain has launched Boycoprotocol, which can simplify the process of obtaining Liquidity and improve transparency. The main components of this protocol are as follows:

Pre-release Liquidity Market: Boycoprotocol supports applications to create pre-release Liquidity Markets, allowing users to deposit funds into the upcoming dApp before it goes live on Berachain Mainnet. This way, the application will have sufficient funds to support its operation when officially launched.

Liquidity Incentive Negotiation: In the Boyco market, applications can directly negotiate with Liquidity Providers (LPs) to ensure that they can obtain the required Liquidity on the first day. For example, LPs may propose an intention to provide $10 million in Liquidity in exchange for 1000 XYZ tokens, and applications can accept or negotiate based on market conditions. This mechanism not only reduces the cost for applications to obtain Liquidity, but also enables users to choose the appropriate Liquidity Provider according to their personal needs.

Transparency and Trust: Boycoprotocol emphasizes transparency, allowing users to have a clear understanding of the Liquidity status and expected returns of their deposits. The application is also able to effectively manage its fund flow. This transparency not only enhances user trust in the platform but also reduces the risks associated with trust assumptions.

The workflow of Boycoprotocol is also very simple.

First, create the market.

The application creates a Liquidity market through Royco.org, defining conditions that users wish to pre-approve. These conditions include the steps to bridge to Berachain and the requirements for depositing into the application’s Smart Contract.

Secondly, incentive mechanism.

The application can provide incentives for potential LPs in the market, or choose to accept intentions proposed by LPs. This process encourages cross-incentives between multiple projects, improving the overall level of Liquidity supply.

Asset lock.

When LP fills in the letter of intent, their assets will be locked until deposited into the Smart Contract of the application. The lock-up period and terms will be clearly communicated to users before the deposit, increasing transparency in the use of funds.

Finally, Liquidity guarantee.

After the launch of Berachain Mainnet, the pre-deposits will be bridged and directly deposited into the Smart Contract of the application. This mechanism ensures that the application can smoothly obtain the required Liquidity when it is launched.

Boycoprotocol not only simplifies the process of obtaining Liquidity, but also promotes collaboration within the ecosystem. Through Boyco, applications can cooperate directly with LPs, rather than competing for the same portion of Liquidity. This cooperative model not only enhances user experience, but also strengthens interaction among various projects within the ecosystem.

For example, applications can jointly create multi-platform integrations to improve the efficiency of Cross-Chain Interaction transactions. By sharing Liquidity, multiple projects can offer users more competitive transaction fees, thereby attracting more users to participate.

Summary

Overall, Boycoprotocol not only provides sufficient liquidity guarantees for applications, but also provides users with a better participation experience by addressing the cold start problem, improving transparency, and promoting collaboration within the ecosystem. With the support of this mechanism, Berachain is expected to build a more open and efficient Decentralized Finance environment, promoting the continuous development and prosperity of the entire ecosystem.