Recap of the Behodler AMA with Blockchain Space
On Monday, July 12th, we had the pleasure to welcome to our Telegram chat:
Justin Goro, The founder and lead developer of Behodler AMM.
We asked him questions about the development of Behodler.
Q~ Thanks for joining us today. Please start off by introducing yourself to the Blockchain Space community and your role in the team ?
A~ Sure, my name is Justin Goro and I’m the founder of the Behodler AMM, the lead developer and so far all the smart contracts have been authored by me.
Q~ Tell us what Behodler is, how it works, and what kind of value the protocol adds to the ever expanding DeFi ecosystem ?
A~ Behodler is an AMM optimized for significantly lower gas consumption than traditional AMMs. Unlike token pairs AMMs, Behodler has a single liquidity token (called Scarcity) issued through token bonding curves by every token traded.
The relative price of the tokens in terms of Scarcity implies their swap price. For instance, if 1 Eth mints 10 Scarcity and 100 Dai can mint 1 Scarcity then we know we can directly swap 1 Eth for 1000 Dai.
Liquidity provision isn’t correctly priced in DeFi currently. What this means is that while LP tokens offer a share of revenue, their actual price does not represent the value they’re offering the ecosystem in the form of liquidity.
The price of an LP token is just the underlying value of the tokens but it should be higher, usually much higher in order to correctly reward suppliers of liquidity.
Behodler’s liquidity token, Scarcity, prices liquidity correctly and as such offers liquidity providers better incentives to supply liquidity over traditional LP tokens.
The effect of Behodler will be to see a correction in the provision of liquidity in DeFi away from chasing low impermanent loss in stablecoin pools towards productive projects with sound fundamentals. Defi as a whole will experience improved growth prospects.
Q~ Can you share with us detailed information on the $EYE/$SCX tokenomics and it’s usecases ?
A~ Sure the incentives tie together across the ecosystem from dapp to governance quite nicely but let me start with liquidity again:
Behodler’s liquidity token is different from other liquidity tokens in that its price represents the marginal value of liquidity. What this means is that the price of Scarcity is the actual value offered to traders who require liquidity.
In order to capture miner extracted value (MEV), Scarcity burns a fee on transfer. The reason this is important is because most Scarcity transfers occur on external AMMs. Since most trades are random walks in price movements, every time an arbitrage trade is exacted, the burn represents a tax on the trader.
Because Scarcity is priced algorithmically, burning implies a higher price. It also means that whenever Scarcity is burnt, some liquidity in Behodler becomes irredeemable. This permanently locked liquidity is called residual liquidity and allows Behodler to suck in liquidity permanently.
The governance token is $EYE and is capped at 10 million and is also burnable. Important governance decisions use dispute resolution to support decision making.
So for instance, if you wish to perform a governance action you deposit EYE. If the governance decision was not in the interest of Behodler, the community can vote to have your EYE burnt.
Voting power is gained from staking EYE.
Throughout the governance infrastructure there’s staking and burning of EYE, adding deflationary pressure. Since it’s launch, 1% of the EYE supply has been burnt and this is just the beginning.
There’s more coming to the ecosystem but this is the core.
Q~ Can you give us an update on what Behodler has accomplished to date and your future plans for Behodler ?
A~ Behodler has already demonstrated consistent gas consumption of around 50% less than Sushiswap and over 60% less than Uniswap V3. The immediate plans for the future include:
- A complete UI overhaul. We have some very talented devs working on a great new front end.
- A rollout of ecosystem dapps starting with our farming dapp Limbo which rewards stakers with a token called Flan. Unlike many farms in the ecosystem, Flan is backed by Scarcity so that the value of flan is tied directly to the locked value of liquidity in Behodler.
Limbo is going to be the first fully community run farm where holders of EYE will be able to set the staking parameters of the pools. Limbo will be an engaging experience for the end user, offering many avenues to participate for every type of crypto personality.
Once Limbo is out, we can expand to layer 2 and we have a strategy for linking liquidity between all the Behodlers on every layer so that you can pick the layer2 (or 1) option you like best without missing out.
QUESTIONS FROM BITCOINTALK
Q~ Can you tell something in detail about Morgoth DAO ? Like how Morgoth DAO is different from many DAO solutions present in market, and how it will function ?
A~ In most dapps, there tends to be a monolothic DAO that controls all governance action and it has one form of consensus for the whole DAO, usually voting. The problem with this approach is that each part of an application has different needs regarding security and the speed with which decisions should be made.
In Behodler, the decision to list a new token is a very important security decision that needs time to be deliberated on. However if we change the APY on a pool in Limbo by 1%, that shouldn’t require long deliberation and entire community involvement.
Recognizing this, our approach to governance is to let each sub set of the ecosystem get its own micro DAO and then web those all together in a DAO of DAO. MorgothDAO is the DAO which holds all the contracts and controls the assigning of rights to microDAOs.
The first MicroDAO we’ll be testing in the wild is LimboDAO, the DAO that will govern the running of Limbo and it’s designed specifically with the needs of a farming dapp in mind. For very important decisions, there’s a voting system but because we don’t want whales dominating, we use quadratic voting.
Then for small decisions of low impact like changing the APY of a pool by a few percentage points, we have a system of flash governance where anyone can make the change instantly but they’re required to deposit EYE. If the community disagrees with the decision they can burn the EYE. This mechanism can be used in tandem with snapshot to allow quick, gas free voting backed by blockchain enforced skin in the game.
The benefit to the DAO of DAO approach is that on the one hand we don’t have to think of everything up front. Governance is very complex and it’s important to recognize this. However, by deferring complex governance to a future microDAO while leaving the contracts in the hands of Morgoth, we gain the benefits of oversight and decentralization.
For those from countries with strong subsidiarity like Switzerland and the US, you may recognize this approach of tiered DAOs and this is no mistake. We believe this flexible federalism of DAOs will grow in popularity once its demonstrated it’s worth long enough.
Q~ Will you please give update on the Limbo, Flan, Pyrotoken that you guys have been working on so hard, also brief them ?
A~ Let me first zoom out and explain how these all fit in. When tokens are listed on a multi token AMM like Behodler, they need to arrive with the same value of liquidity as the existing tokens. So let’s say Behodler has 10000 Dai in it. A new token listing would need to be preseeded with $10000 of liquidity in order for the relative prices to be correct.
Limbo is a staking dapp that offers a familiar farming experience, rewarding stakers with a token called Flan. The tokens on Limbo will be tokens we want to list on Behodler. The purpose of Limbo will be to raise the required liquidity through farming. Once the required liquidity is raised, we migrate the staked tokens across to Behodler. The migration generates Scarcity and we use that Scarcity to purchase flan on the open market. In this way, the value of Flan is linked directly to the value of liquidity on Behodler.
The contracts for Limbo and LimboDAO are complete and tested. The UI is in the design phase. As mentioned in the DAO question, Limbo is going to be completely community calibrated, allowing those with most at stake to have a say in the incentives. We have some data wizards in our community who will be putting up some interesting dashboards to help the community make the best decisions. So if you’re just into blockchain governance nerding out, this will be very fun.
Pyrotokens are a burnable wrapper for tokens traded on Behodler. You can mint pyrotokens with regular tokens similar to how you mint Weth with ETH. A pyrotoken has a redeem rate with it’s underlying base token and when pyrotokens burn, the global redeem rate goes up, similar to a reflect token.
Pyrotokens burn on transfer and on redeem so they make for an excellent instrument for HODLing your favourite crypto.
Pyrotokens also allow for low gas, yield stacking, something that will be rolled out after Limbo.
QUESTIONS FROM TWITTER
Q~ Does Behodler aim to compete with other AMMs such as Uniswap or does it see itself as working alongside other AMMs within the wider DeFi ecosystem ?
A~ Open blockchains are very different to traditional markets because everything built on Ethereum is composable and permissionless. I don’t believe dapps compete as much as they create and fill niches.
For instance, the launch of Uniswap 3 with its NFT liquidity has opened up a whole downstream industry of dapps seeking to convert Uniswap 3 positions into ERC20 tokens.
On a one-on-one basis, Sushi has identical code to Uniswap version 2 and yet fills a completely different niche, acting as a kind of crypto incubator.
Even across blockchains, Bitcoin has benefitted tremendously from the rise of Ethereum through initiatives like WBTC and many Ethereum dapps including Ethereum itself was funded from bitcoin funds.
Back to Behodler…
Because of our low gas consumption, one of the areas we’ll be expanding to is the direct trade of liquidity tokens from other AMMs.
You can zap your Uniswap LP into Sushi Lp or Curve LP at half the cost of a uniswap trade, you can really build some interesting layer 1 defi dapps on top of Behodler.
In this way the success of other AMMs will help Behodler become a clearing house of liquidity trade and similarly the rise of Behodler will ease the frictions of jumping in and out of liquidity pools on other AMMs.
Everyone wins 😊
Q~ In a bid to raise liquidity, and create intrinsic marketing buzz to bring attention to Behodler, You introduced the Pooltogether initiative, can you explain how this work to new users like me and the conditions to participate ?
A~ Sure! Pooltogether launched an initiative to allow teams to create no loss lotteries to reward their commmunities.
We’ve set up a pool for the uniswapV2 LP token ETH/EYE. The easiest way to participate is to head over to this page
Here it will tell you the weekly reward in EYE and provide a link to the EYE/ETH LP token so that you can pool on Uniswap. Right now the odds of winning are quite high for small deposits and the prize currently is over $1000.
Xiaolin : What do you mean by no loss in this context ?
Justin Goro : You enter by staking a token. In this case the ETH/EYE Uniswap 2 LP token. And you have a chance of winning an EYE prize once a week. But you get to keep your token unlike a traditional lottery where you lose money for entering. Pooltogether has no losers and one winner so there’s no risk to participating.
Q~ Did you raise any funds through private sales or public sale because I see you applying for Gitcoin grant fund, what do you plan to use this grant for and how can we help in funding this innovative project?
A~ We initially had an airdrop of EYE tokens and two subsequent liquidity staking events so funding has been organic until now with no private sales.
We plan to use the gitcoin grant to fund our talented team of front end devs and to seed synergistic partnerships. We’re in talks right now for a great upcoming partnership I’m very excited about.
Thank you for wanting to support us! Here are some of the best ways:
Behodler Liquidity Protocol | Grants
What is Behodler? Behodler is a liquidity protocol centered on a highly gas efficient, single contract AMM. How will…
Jump in on that Pooltogether pool I mentioned. We have a stretch goal to launch another pool if enough liquidity joins the first pool.
A direct way to support the project is to buy EYE or SCX on either Uniswap or Behodler.io
Finally join our telegram or discord chat (links on behodler.io or on this AMA poster). We have a really great community and would love to have you involved.
QUESTIONS FROM TELEGRAM
Q~ Beholder is a platform that use the Ethereum network as base, but as we know, is very frustrating pay high fees, so have your considering integrate more chains?
A~ Absolutely! Once Limbo is done, we’ll be moving to Layer 2 options, probably starting with Optimisim because Maker is making a permissionless bridge.
Our plan is to send Scarcity (herewith SCX) from layer 1 to layer 2 and listing it on Behodler L2 as a tradeable token. Then we take SCX from Layer2 to layer 1 and list it on Behodler Mainnet. In this way, we link liquidity pools across layers. Our L2 options will also allow us to build some exotic dapps on top of Behodler. Lots to be excited about! More on this in the future.
Q~ What an amazing project ✌️. Can you please explain in details how Behodler achieves over 50% saving on gas fees?
A~ Thank you! The first step is to house all of the liquidity in one contract. Most AMMs partition their liquidity and then have routing built on top. On ethereum making external calls to contracts is quite expensive so routing through one is much cheaper.
In the white paper I explain how the math behind behodler was calculated. I managed to simplify it down to a very simple equation. Then instead of calculating values, we just ask the client browser to do the calculations and Behodler just verifies it’s correct. Similar to proof of work mining. This saves a lot of gas.
Behodler first launched as a beta experiment and the data collected really allowed me to optimise gas tremendously.
Q~ Apart from using metamask wallet, can I connect my trust wallet to your platform?
A~ Right now we’re only supporting metamask but our front end devs are working at an amazing pace (I really can’t sing their praises enough) at bringing out a really excellent new UI that will support all the popular wallets.
Q~ Token burning is beneficial to any project because it can control the number of tokens in circulation and provide investors with greater incentives. Does your great project have a plan for token burning?
A~ Token burning is my middle name. I’ve written long articles on how much I believe in burn incentives. This is why every token I’ve ever created is burnable. There are so many powerful things you can do with simple burning. For instance, Pyrotokens are built on the same philosophy as my first dapp (weidaidapp.com) where a base reserve backs a circulating supply that is burnable. This means the token value can never decline with respect to its base.
Instead of trading fees to grow liquidity, Behodler utilizes burning of Scarcity OUTSIDE of behodler on places like Sushiswap and Uniswap so that arbitrage trade mostly conducted by miners is rerouted back into Behodler as liquidity.
I forgot to mention that if a token is burnable like Maker, then on every trade, a fee of maker is burnt. This offers deflation as a service to holders of that token.
I can go on about burning forever so I’ll stop here.😁🔥
Q~ What are the advantages of Your project ?
A~ Let me use this as a summing up question:
- Low gas on swap
- Purchase a claim on marginal liquidity. Minting Scarcity is like buying half of a swap. Holding it is taking a bet on the marginal price of future liquidity. No other dapp offers this.
- Engaging fun farming through limbo (APY will necessarily increase over time as liquidity grows)
- Pyrotokens reduce the risk of HODLing your favourite token
- Every feature added to Behodler adds more deflationary pressure to the existing features. One of the things that matters to me a lot is to give people the option of engaging in low risk, high return defi without having to follow market movements 24/7. Bitcoin embodies this and I’d like Behodler and everything it’s built on to continue this tradition.
We strongly welcome contributions and award grants and bounties where we feel there is high value add. A lot of community members have stepped up out of nowhere and have become very active at Behodler. There’s a great community spirit. In terms of info, I’d say just keep watching our TG, twitter or discord depending on your preference, to keep a finger on the pulse.
Thank you for having me today! Some excellent questions. As I mentioned before, we have an excellent community, a really engaged and friendly team and a bright future. So reach out to us. We’d love to hear from you😊
It’s really nice having the Behodler project in here!!!
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