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 and help these projects get started.

According to the announcement, projects that have been deployed on the Berachain testnet can apply to participate in the RFB program before October 9 and have the opportunity to join the Boyco project at the same time. The Boyco project allows project owners to directly obtain liquidity support from Berachain by connecting to the Royco Protocol, allowing them to focus more on project development and community operations. This incentive mechanism provides developers with a good opportunity to achieve faster ecological construction.

01 Main challenges facing DeFi

In the DeFi field, many projects face severe challenges, which often restrict their development potential.

First, the cold start problem is still a stumbling block for most emerging applications. Many DeFi applications were unable to attract users to trade due to lack of liquidity when they were first launched, making it difficult for the projects to gain initial recognition.

In addition, the problem of centralized liquidity supply is also quite prominent. Many applications tend to rely on a small number of high-net-worth investors and market makers (MM) to provide liquidity, which not only exacerbates liquidity inequality, but also greatly reduces the participation opportunities of ordinary users.

Secondly, many applications have adopted complex points and reward mechanisms to motivate users, but these mechanisms lack transparency. Users often find it difficult to understand the actual value of points, resulting in a gap between expectations and actual benefits, which in turn affects users’ trust.

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Finally, high transaction fees and network congestion issues persist on many chains, making small transactions uneconomical and thus limiting broad user participation.

02 Boyco agreement ensures sufficient liquidity

In response to these challenges, Berachain launched the Boyco protocol, which simplifies the process of obtaining liquidity and improves transparency. The main components of the protocol are as follows:

Pre-launch liquidity market: Boyco Protocol supports applications to create pre-launch liquidity markets, allowing users to deposit funds into upcoming dApps before the Berachain mainnet is officially launched. This way, applications will have enough funds to support their operation when they are officially launched.

Liquidity Incentive Negotiation: In the Boyco market, applications can negotiate directly with liquidity providers (LPs) to ensure that they can obtain the required liquidity on the first day. For example, an LP can express the intention of "I will provide $10 million of liquidity in exchange for 1,000 XYZ tokens", and the application can accept or negotiate according to market conditions. This mechanism not only reduces the cost of obtaining liquidity for applications, but also enables users to choose the right liquidity provider according to their personal needs.

Transparency and Trust: The Boyco protocol emphasizes transparency, allowing users to clearly understand the liquidity status and expected returns of their deposits, and the application to effectively manage its fund flows. This transparency not only increases users' trust in the platform, but also reduces the risks caused by trust assumptions.

The workflow of the Boyco protocol is also very simple.

First, create the market.

Applications create liquidity markets through Royco.org and define conditions that they wish to be pre-approved by users. These conditions include steps to bridge to Berachain and requirements to deposit into the application’s smart contract.

Second, the incentive mechanism.

Applications can provide incentives to potential LPs in the market, or choose to accept the intentions proposed by LPs. This process encourages cross-incentives between multiple projects and improves the overall level of liquidity supply.

Asset lock-up.

When LPs fill out a letter of intent, their assets will be locked until they are deposited into the application’s smart contract. The lock-up period and terms will be clearly communicated to users before depositing, increasing transparency in the use of funds.

Finally, liquidity is guaranteed.

After the Berachain mainnet is launched, the pre-deposit will be bridged and deposited directly into the application’s smart contract. This mechanism ensures that the application can smoothly obtain the required liquidity when it is launched.

The Boyco protocol not only simplifies the process of obtaining liquidity, but also promotes collaboration within the ecosystem. Through Boyco, applications can work directly with LPs instead of competing with each other for the same part of liquidity. This cooperation model not only improves the user experience, but also enhances the interaction between various projects in the ecosystem.

For example, applications can work together to create multi-platform integrations to improve the efficiency of cross-chain transactions. By sharing liquidity, multiple projects can provide users with more competitive transaction rates, thereby attracting more users to participate.

summary

In general, the Boyco protocol not only provides sufficient liquidity for applications, but also provides users with a better participation experience by solving 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 DeFi environment and promote the sustainable development and prosperity of the entire ecosystem.