Booga Owned Liquidity (BOL) V1
Booga Beras’ goal is to make POL as simple as possible. Ideally, just hold an NFT and get full exposure to it! Booga Owned Liquidity (BOL) puts us a step closer into achieving this goal, not only for our holders, but for various protocols that want to engage with the ecosystem.
BOL is our take on what a protocol can do with its protocol owned liquidity. With BOL, BB holders and external users can maximize their exposure to BGT yields in POL, and protocols can tap into BGT incentives without the need to get gauges or assets whitelisted.
Overview:
BOL maximizes performance and participation in POL with 3 elements:
· An automatically managed treasury deployed into high performing assets (By BGT yield)
· The BB validator with advanced automation (5-hour Berachef updates for max POL bribes)
· A framework for token distributions to attract more incentives/bribes and mitigate sell pressure on those incentives
Put into practice, BOL acts as a BGT farm, and grants access to the underlying BGT yield.
How it works:
For BB holders and users:
- Hold a BB or deposit accepted assets into the HoneyPot and receive an “LP token” based on your share of the pool
- The treasury will automatically deploy liquidity into BGT whitelisted pools, based on the highest performance
- As BGT builds up in the treasury, it will be automatically delegated to the Booga Beras validator
- The BB validator points emissions based on maximum potential bribes, by accepting even the most volatile bribes.
- Combining BB validator delegations and high BGT yield pools, the BGT in the treasury will have superior performance
- Users can withdraw their deposits by burning the LP token.
For Protocols:
If a protocol hasn’t been able to whitelist their pools for BGT emissions, they would normally be unable to tap into POL. However, BOL will act as a proxy for POL, allowing even those who haven’t gotten their assets whitelisted to benefit from its mechanics.
- Instead of bribing a validator, you can bribe the HoneyPot!
- The HoneyPot will take in any token as a bribe, even if it’s not whitelisted for BGT emissions (rate and bribe amount will be determined at the time of deposit)
- The tokens from the bribe get distributed amongst BB holders and depositors in the HoneyPot (Tokens are spread between many holders, not sold in one clip)
- Through BOL, the yield derived from BGT is turned into HONEY, and deposited as incentives in a liquidity pool of the briber’s choice.
BOL effectively allows protocols to leverage the mechanics of BGT emissions, making sure they are getting the maximum output, and their tokens are spread amongst a community of users, potentially onboarding them to the protocol.
For our users, this is an effective way to maximize BGT yield and sell its performance automatically while gaining exposure to multiple new tokens at a prime rate.
Note: Users won’t receive BGT from this strategy, only benefit from its yield and receive an LP receipt token to claim back their deposit. If a user wants to own and hold BGT, BOL is not compatible.
Why it works:
Validator Side:
Berachain’s POL introduces several layers of economic games into the traditional POS system, and information asymmetry is your best friend. Those who know how to navigate and maximize efficiency in POL will outperform, and Booga Beras is set to do just that.
A validator in traditional POS chains is tasked with verifying transactions and producing blocks. In some cases, validators also serve as relayers or contribute to the chain’s codebase, but POL is the first instance where their role is expanded to have economic influence in emissions.
In Berachain, a validator is a liquidity coordinator and helps emissions find the most productive home. This introduces a barrier, where only the validators that are most familiar with POL and have the right tooling for their operations will perform at the highest potential.
Validators can change their incentive configurations very frequently, which is not feasible to do manually. Instead, a validator in Berachain should operate with a high level of automation, where advanced tooling provides an edge in performance, and this is what Booga Beras will do.
Incentives Side:
POL incentives are a perfect way to bootstrap liquidity, but there is a catch, they require whitelisting. On a long enough timeframe, we expect most assets to be whitelisted and protocols should be able to create their own gauges through reward vaults, but this won’t happen at the start.
We can assume that on mainnet day 1, Bex, Bend and Berps will have their reward vaults, enabling assets like BERA, WETH, HONEY to receive emissions. Essentially, it will likely look a lot like the current state of testnet, where native apps send fees to BGT, and we only have “big” assets whitelisted.
This means that POL might not be ready for protocols to tap into right out of the gate, which is why our proxy could work as a great alternative before whitelisting is enabled. Even if whitelisting assets is possible on day one, they will still need to go through a governance vote and get support from the majority of the community, which means there will be a delay in how fast assets can tap into BGT.
Aside from that, for a validator to benefit from bribes, it will most likely involve selling the assets from the bribe, which translates into immediate selling pressure from the protocol that placed the bribe. On our BOL mechanism, the tokens are delivered to a large community of BB holders or depositors into the treasury, which means that selling pressure is split into multiple wallets, or protocols might even onboard new users as the tokens land in the hands of Defi enthusiasts.
Booga Owned Liquidity V2 (Potential expansion)
POL is complex and it has opened up a range of new products and mechanisms to be created. While V1 of BOL can be applied right from the start of the chain, a V2 iteration would also be possible in the future.
Current exploration of POL and BGT mechanics has largely been thought of as simple LPs of a token pair that gives BGT emissions. However, the core mechanism of POL enables any ERC-20 to receive emissions upon passing a governance proposal. Current examples of POL have this ERC-20 as an LP receipt of something like BERA or HONEY, but it could be anything that adjusts to the whitelisting parameters.
Instead of a traditional token, the ERC-20 can have a full list of requirements for users to obtain, which means you could in theory bring a Galxe or Zealy quest to POL, you could enable BGT emissions to power your in-game economy, or you could make our BOL treasury directly eligible for BGT incentives.
In a hypothetical scenario, we could do this:
Make a governance proposal to whitelist asset “$BOL”
To get asset $BOL, you need to:
· Hold a Booga Bera
· Delegate BGT to the BB validator
· Deposit into the BB treasury
And in return, you get a token as proof that you completed all those requirements. This token is $BOL.
Now, instead of needing a basket of tokens to farm BGT, a user can simply complete the requirements for the $BOL token and benefit from the entire incentive structure and mechanism behind it.
Note: This would require us to pass a governance prop to whitelist the asset, which is easier said than done, but certainly possible.
While this is only a hypothetical scenario, POL in its true form on mainnet will enable this sort of mechanism, where creativity will be the only constraint. A lot is left to discover, but our goal with Booga Beras will be to stay at the forefront of POL and always innovate with new mechanics.
