Honeypot Finance: Bringing Sustainable DeFi on Berachain | TKX weekly
by @uuwagyuu
sponsor TKX CAPITAL
As one of the most anticipated blockchain launches of 2024, Berachain is introducing the Proof of Liquidity (PoL) consensus mechanism. It is designed to improve the liquidity management of the network by encouraging the active participation of validators and liquidity providers. Among the DeFi projects set to launch on Berachain is Honeypot Finance, which has recently completed its pre-seed round and is gearing up to offer new DeFi features that aim to bring sustainable DeFi to users.
Intro
Launching on Berachain, Honeypot Finance introduces the first community-run DeFi Hub with a flywheel model that generates dual incentives. Designed to tackle common DeFi issues like liquidity shortages and transaction security, Honeypot Finance employs a Fair Token Launch model to ensure equitable distribution and an award-winning Swap Protocol to enable secure and efficient trading.
The team behind Honeypot Finance includes veterans of the crypto industry, with the project’s CEO and CTO previously leading Berachain’s largest developer community, and other key team members who have contributed to projects like Trisolaris, Tencent, and IoTex.
In February 2024, Honeypot Finance secured pre-seed funding from AC Capital and DEXT Force Ventures to drive further innovation and growth. The amount raised has not been disclosed.
How it works?
The special of Honeypot is its flywheel mode, which is a core component of Honeypot Finance. This model is designed to perpetuate growth and engagement within the platform by continuously cycling value through its ecosystem. It incorporates multiple elements of the platform, each designed to reinforce the others, thus creating a sustained cycle of incentives and rewards.
Components of the Honeypot Flywheel Model:
- DreamPad: Serves as a launchpad for new projects, offering immediate and deep token liquidity. DreamPad uses a Fair Token Offering (FTO) model which includes a community-driven trust layer (DAO) to protect investors from common pitfalls like rug pulls and premature selling by developers.
- HenloDex: This decentralized exchange (DEX) is enhanced by the Batch-A2MM model, which is notable for its low slippage and resistance to maximal extractable value (MEV) attacks. HenloDex aims to provide a superior trading experience by ensuring liquidity and security for long-tail assets.
- HiveNode: Integrates deeply with Berachain’s Proof of Liquidity (PoL), channeling consensus mechanism rewards back into product liquidity and simplifying the PoL mining process. This integration ensures that liquidity providers are adequately incentivized.
Flywheel:
- From the user perspective, the flywheel begins with DreamPad’s fair launch serving as the entry point for liquidity. Once a token is launched, it can be immediately traded on HenloDex, providing liquidity and allowing users to obtain PoL incentives through HiveNode.
- The flywheel model uses $HPOT as the governance token, which drives engagement and incentives across Honeypot’s platforms. $HPOT incentivizes project launches and liquidity provision, enhances trading activities, and supports community-driven governance decisions.
- Revenue generated by nodes and fees collected by the protocol are used to buy back or burn $HPOT, thereby supporting the token’s price and aligning with the long-term interests of holders.
Dual Incentive System:
- The flywheel incorporates a dual incentive system where $HPOT, along with $BGT and $Honey, form a three-token ecosystem that benefits token holders by increasing their potential rewards from participating in liquidity provision and governance.
- $HPOT holders can engage in PoL liquidity mining, enhancing their yield opportunities, while $BGT enhances voting power within the community.
This model is designed to be self-sustaining, with each component feeding into the next to maintain and increase activity within Honeypot Finance.
Summary
Honeypot Finance aims to address DeFi challenges such as liquidity and security through its flywheel model on Berachain. It is certainly not just another DEX; with components like DreamPad, HenloDex, and HiveNode, it promises to sustain growth. It will be exciting to see their launch and how it combines with Berachain’s ecosystem.
