Berachain fixes this: Productive liquidity for dapps by Camila Ramos

Transcript

okay perfect thank you okay first of all hey everybody thanks so much for being here I know conference has been very long I'm hoping to wake you up with this talk I've seen that there's a bunch of people working in the back this is going to be a talk about kind of a pragmatic and practical approach to how to pick a developer ecosystem to build on in 2024 I'll talk a little bit about my background but in general um I'm a builder I studied computer science I worked as an engineer here in web 2 and for me this is kind of me talking to you as like a personal advice obviously I work at bar chain so there's going to be some points where we talk about bear chain but in general this is a talk you as a builder you're building a product how do you select an ecosystem in 2024

what are the things to consider and we're going to talk a little bit about bear chain so my name is Camila I lead developer evangelism at Bear chain so we're going to start with traditionally when we thought of different ecosystems different chains there's been this blockchain trilemma that we have been kind of taught to consider these three factors speed security decentralization and kind of my thesis and and the thesis of bear chain and you know I've heard Smokey and other people at Bear chain say this is that over the last like x amount of time these three things have kind of converged to be the same across all ecosystems obviously there's differences obviously there's Nuance but for the most part when you look at speed security decentralization of l1s especially these new l1s they're kind of all converging to the same thing

so given that these are all kind of the the same thing what are the actual considerations that you should take when deciding on what to build so I posit that the things that you should actually be considering in 2024 are the following liquidity ecosystem and distribution so let's start with liquidity um I'm going to give you guys a crash course on liquidity because um just to kind of all be on the same page and one thing that I thought was really interesting is I found this quote on Twitter and it says best to be aware that liquidity comes from people I think in general when we think about liquidity when we think about liquidity on an ecosystem we think of it as a number we think about tvl or we think about some other metric but I think the real important thing to consider here is that

liquidity is like an indicator of people's interest and liquidity has to come from somewhere it's not just something that like exists out of thin air someone has to provide this liquidity so when we're talking about ecosystems with deep liquidity it's an indicator that there's a lot of interest and that there's either a lot of activity or going to be a lot of activity so 99% of successful onchain apps need liquidity to function even if we're talking about non- defi apps most applications in crypto use some sort of cryptoeconomic incentive and because of this liquidity matters so let's define liquidity real quick it's a measure of how easily assets can be swapped either for other assets or for them to be Chang to cash and the key part here is without it

significantly affecting its price so if you've ever tried to do a swap on maybe like you've participated in memec coin season on Salon you try to do a swap it'll give you a little message that says Um this can have significant price impact consider doing a swap at a lower quantity if you've seen that message that's kind of what this is getting at is if there's low liquidity and you try to do a swap for a big amount or you try to like change this asset for something else you're going to significant significantly affect the price because there's not a lot of liquidity there and we'll talk about what this means exactly but the point here is that someone has to provide liquidity for you to be able to do these actions whether it be to trade whether it be to borrow whether it be anything that uses cryptoeconomic

incentives someone has to provide this liquidity and again this isn't exclusive to trading any app that uses cryptoeconomic incentives has to think about liquidity whether this be even something like foraster and the thing about crypto right is like if you're building something in crypto you're most likely using cryptoeconomic incentives it's the differentiator of web to right so you're most likely using this so let's talk about what it means for an ecosystem to have deep liquidity it means that you can trade at the best price and again this has an asteris it's not necessarily trading as in like a swap or trading one asset for the other but it means that you can interact at the best price whatever that may be right like in asri and minimal slippage and what a lack of liquidity means is that there's um a lot

of change in price High slippage and it's likely an indicator of a lack of network activity interest signal so this is where we're going to talk about bear chain so bear chain is a modular evm compatible L1 powered by proof of liquidity and before we get into what proof of liquidity means I think it'll be really helpful to talk about what other blockchains use what consensus means and then talk about how Pro of liquidity is powering really interesting applications on be chain so p p is be chains consensus mechanism that creates a flywheel of both liquidity attraction and retention through Network incentives but first let's just cover our basis when we say consensus mechanism like what does that mean

exactly it's a mechanism by which the different nodes in the chain come to an agreement on the state of the chain it's what approves transactions what says yes this transaction is valid yes I'm agreeing on the new state of the ledger so let's talk about proof of stake um how consensus works on ethereum so that we can have kind of like a base to compare to when we're talking about P so in um proof of stake users can stake 32 eth to become a validator now you have the opportunity to become a validator and with being a validator you have the right to produce blocks validators on ethereum are randomly selected to produce blocks so you're not selected every single time some blocks you're not going to build a block comes along you're selected to build you build that block you get the fees from

building that block and in every other time where you're not chosen to build that block you still get fees from being a validator and securing the network and the kind of main point here is that being a validator is securing the network right you're one of the nodes that's contributing to the security by saying I looking at all these transactions I am attesting to the fact that yes this transaction is valid and I'm agreeing to the new state of the chain so 32 e is locked in a smart contract and now you have the right to be a validator and to help secure the network what are kind of the downsides or the you know the things that could be improved when we think about proof of stake in proof of stake you're locking all of this liquidity to secure the network so if we think of 32 eth I don't

know at the current price I don't know it's a lot of money and all of this liquidity is liquidity that's not in the ecosystem it can't be provided to pools it it's not available for your users to leverage so now let's talk about approv of liquidity this is be chains consensus mechanism so what we just talked about proof of stake is ethereums and proof of liquidity is be chain so the first step is that users provide liquidity to one of be Chain's native daps this can be the Dex so all of the be chain apps start with a B but they're the ones that we all know so it's a DEX it's lending and its pers here just add a b um so by doing this you now earn bgt bgt is the governance token of the network and with bgt you can delegate to validators and

earn rewards from the validators just like you would traditionally now the only only thing that not the only thing one of the things that's really interesting and that's different from proof of stake is now with bgt as a governance token holder you can vote on which apps get what we call Network emissions so let's say that you're you know you're building an application and you're like hey I want to use this new primitive that we're calling Network admissions to use in my application and when we talk about admissions it's literally like money funds that your application can use so I can say I'm a bgt holder I think this project is really cool I think they're long-term aligned um you know whatever other rationale you have I want to vote for this app to get bgt emissions and only the people who are bgt holders can do

this and like zooming out a bit and not really looking at the steps the thing that's really interesting here is that in order to become a validator it's not just about staking eth it's not just about having money and being like I have a lot of money and I'm going to stake it now I can earn rewards the action is now gated by doing something very valuable for the ecosystem which is providing liquidity that now the whole ecosystem can leverage and this is like kicks off a really cool flywheel where it has this effect that it attracts new users and it attracts new teams so let's just go through it quickly a user comes they provide liquidity now they earn bgt with this bgt they can earn rewards through delegating to a Staker by by doing this now there's deeper liquidity right because I I gave some liquidity now

there's more liquidity than there was before as a developer as a team you want to go somewhere where there's deep liquidity for the reasons that we just talked about right applications need liquidity it's something super important to consider when building and again it's an indicator of kind of the activity and interest on a chain if there's more teams there's more interesting applications there's more things to do on the Chain this attracts more users as new users come in they provide liquidity because they want to earn fees because they want to do governance and it like kicks out this flywheel that incentivizes sticky liquidity so there's a lot of kind of ecosystems out there that do you know all of them like crypto is a game of incentives right so every ecosystem has an incentive to bring liquidity to their chain whether this be airdrop whether this be um retro pgf

whether this be grants these are all different ways for ecosystems to get liquidity and now what happens is that okay you've gotten liquidity success and then a month later a new chain launches that's doing an air drop that's going to do retr pgf that's going to do something else people what do they do they take their liquidity they Bridge it over because they want air drop and it kind of becomes this like musical chairs game of people moving their liquidity around which is not really great for the ecosystem because now all of your liquidity is gone so what's really cool about this is it incentivizes sticky liquidity liquidity to come and liquidity to stay okay and now let's talk about the other two ecosystem and distribution um be chain a lot of people ask me like Cammy why did you join be chain you know like there's so many cool

projects in the space what made you decide on be chain be chain has a super super strong developer ecosystem with over 250 teams building and they're pre-main it and I think for any you knowbody that's been working in the space for a while that's pretty rare you know it's really difficult for a team to get to that level and barin has this really really strong EOS system and you know the more projects you have you kind of have these like new opportunities that don't really exist on chains where there's not that many ecosystem projects and when we talk about distribution I think this is one of the most important things for teams because at the end of the day right you're building a product and you want users so if you're building on a chain with no users you're going to have a very hard

time and for those who don't know I'll speedrun really quick um be chain started it's kind of Origins were an nft collection these nft holders became like super cult-like and there like these dieh hard you know bear holders and a lot of things kind of came out of this initial nft collection so they have this very cult-like following that spans the globe and this is like my favorite slide in the whole talk I'm actually going to stand over here because I think I'm probably blocking it when I stand there when you think about building something right your goal is to have users because you want to make money if you don't have users you don't make money so you your options are you can build a produ a product in an ecosystem with lots of users or you can build a product and try to attract users to a

new ecosystem you can say hey I'm building on this chain I'm just going to make up a chain um Diamond chain and I promise it's a cool chain my app is really cool you should come join this ecosystem to use my chain or you can go to an ecosystem that already has a ton of users and say I'm building this cool app and there's already a ton of distribution for you a is exponentially easier than b and as a builder like this should be one of the key considerations that you're taking when thinking about where do I build I put this tweet here here and scoot over here um and basically the the gist of this tweet is I think in the end l1's and l2s that are successful are actually actually going to feel a lot more like traditional Brands I think there's you know a group of people in in

crypto Twitter and just in crypto in general that say you know we should be building headless protocols and by headless they mean kind of like uh where your brand is kind of abstracted away and no one really knows that they're using you and like no users won't really care in the end what they're using in the background because they're not going to know my thesis is I think the most successful ecosystems will feel like Brands they'll be known for their brands they'll be known for their names and the more success you have at building a strong brand I think is going to matter in the next 10 years so be chain has this like really awesome brand that they're working on and honestly I think in the long-term game this is going to mean something for distribution so tldr bear chain po chain with mechanism to attract and keep

liquidity you turbocharge applications with bgt emissions it's evm compatible all the best developers in the world can start building on it today with minimal friction cult-like following great distribution healthy ecosystem it's one of the best places I think in crypto to build on today I'm going to leave some links here I know obviously you can't click on these but I'm going to put these this whole presentation on my Twitter so that you can click on this also if you take a picture you'll be able to access it but these are the resources that I think are best for thinking about starting to build on bear chain we have the build-a bear incubator this resource with kind of all the docs and all the interesting writing around p and Beyond and the bear chain handle and that's it thanks so much thank you questions oh

there's oh sorry yeah sorry if are there any questions I forgot we can take questions it's okay say a little bit louder yeah I mean I'm going to answer from my point of view I didn't create the chain right so I'm just going to give you kind of my point of view I think there is something to be said around around um building an ecosystem and a brand that is your own versus kind of like an offshoot from something else again I wasn't around in the very very early days there's team

members actually that are here maybe they can give you a better call but that's kind of my my take like if I was building something today that would be kind of my answer is like if I'm an L2 there's certain kind of like restrictions that come with building an L2 versus an L1 any other questions okay cool if anyone wants to chat has any other questions I'll be around after this