Author: 0xresearch.
In the crypto world, there is a commonly overlooked truth: 'the simpler, the more dangerous.' DeFi has developed to this point, heading towards 'foolproof operations': don't know how to use contracts? Don't understand blockchain? No problem, various SDKs, aggregators, and wallet plugins have packaged complex on-chain operations into 'one-click interactions.' For example, Shogun SDK can compress DeFi operations that originally required multiple steps of signing, authorization, and transfer into a single click, first landing in the Berachain ecosystem.
It sounds perfect: who doesn't want to complete on-chain operations as easily as using Alipay to scan? But the problem is that these 'no-threshold tools' also hide the complex risks on-chain. Just like someone going crazy with credit card overdrafts after getting one, it's not that the credit card itself is problematic, but they don't know that overdrafts need to be paid back. In DeFi, once you authorize a contract to manage assets, it may permanently control your entire wallet balance; for newcomers lacking awareness, a casual click on 'authorize all assets' could very well be the start of 'one-click liquidation.'
Behind the convenience lies a huge trap:
Clicking 'authorize all assets' is like handing your bank card and password permanently to a stranger;
Behind high-yield promotions, there may hide risks such as 100% slippage, hidden traps in the liquidity pool;
Most users do not know that certain contract authorizations can allow others to control your wallet indefinitely;
Real case: In 2023, a user lost $180,000 within 2 minutes due to mistakenly clicking a phishing link— the process was as simple as scanning a QR code for payment, yet it led to devastating consequences.
Why are all chains pursuing 'foolproof interactions'?
The reason is simple: on-chain interactions are incredibly complex and unfriendly to newcomers. You need to download a wallet, manage mnemonic phrases, understand gas fees, learn cross-chain bridges, comprehend token swaps, grasp contract risks, click authorizations, complete signatures... Any mistake in any step could lead to asset loss, and even if the operation is completed, you must pay attention to whether the interaction was successful and whether further actions like revoking authorization are needed.
For Web2 users without a technical background, the learning cost is like needing to learn a new language to make payments via mobile. To enable them to seamlessly enter the on-chain world, we must first flatten this 'technological mountain.' Thus, interactive tools like Shogun SDK have emerged: compressing what originally required 100 steps of on-chain operations into 1 step, reducing the user experience from 'expert-level operation' to the simplicity of 'Alipay scanning.'
From a broader ecological perspective, RaaS (Rollup-as-a-Service), one-click chain launches, and other infrastructures are also maturing. In the past, launching a chain required writing underlying code, deploying consensus mechanisms, building browsers, and creating front-end pages, which could take months of development. Now, using services like Conduit, Caldera, and AltLayer, you can deliver a usable EVM-compatible chain within weeks, and even have them help you with governance tokens, economic models, and block explorers, making it as simple as opening a Taobao store. This allows any project team, community, or even individual hacker marathon team to 'start a chain business,' truly realizing the 'popularization' of on-chain entrepreneurship.
But a low technical threshold does not equal an easy cold start.
Many people mistakenly believe that 'building a chain quickly' means it will succeed; in fact, the biggest problem with cold start is not 'whether it can be done,' but 'whether anyone will use it.' Technology is just a stepping stone; the key to whether a chain can survive is whether it can accumulate genuine, sustainable user behavior.
Subsidies and airdrops can indeed bring a large number of users and TVL in the early stages, just like a milk tea shop can attract people to queue across the street with free activities—however, once the subsidies stop, it's like the milk tea returns to its original price; if the product itself is not tasty or the service is poor, consumers will turn away immediately, and the queue will vanish.
The situation on-chain is similar: many new chains appear to have very high TVL during the subsidy period, but most of it is funds from project parties, foundations, or institutions pledging to each other, creating a false data illusion; the actual number of real users and transaction volume has not increased. Once the subsidies and high APYs end, liquidity recedes like a tide, on-chain transaction volume plummets, and TVL evaporates.
Worse still, if there is a lack of genuine trading demand on-chain, subsidy-driven funds will only form a short-term arbitrage loop—the user's goal is to 'cash out and leave' rather than using the applications on-chain to create an ecological closed loop. The higher the subsidy, the more speculative funds there are; once the subsidy stops, the retreat is faster. What truly determines whether a chain can successfully cold start is not the scale of airdrops or subsidies, but whether there are projects that can attract users to continuously stay on-chain for consumption, trading, and community participation—this is the starting point for a public chain to enter a virtuous cycle.
Taking PoL as an example: how the chain incentivizes the real economy.
Among many new chains, Berachain has made interesting explorations. It pioneered the PoL (Proof of Liquidity) mechanism—unlike traditional PoS that distributes rewards to nodes, PoL directly allocates the chain's inflation rewards to users who provide liquidity, using incentives to drive genuine economic behavior on-chain.
For example, a traditional PoS public chain is like rewarding company shares to data centers (nodes) for server maintenance; while Berachain directly divides the shares to you—as long as you provide liquidity to DEXs, lending, LSTs, etc., on Berachain, you can continue to receive rewards.
What’s more interesting is the design of Berachain's three-token system:
BERA: The native token of the mainnet, used for gas fee payments and also serves as the main carrier for PoL rewards;
HONEY: The stablecoin within the ecosystem, used for transactions, lending, etc.;
BGT: Governance token, which can participate in voting or gain extra rewards through locking.
Three tokens interact to form a 'earn - use - govern' flywheel, promoting funds to stay on-chain while enhancing governance participation.
From the data, Berachain's mainnet has been live for only 5 months, with TVL close to $600 million and over 150 active native projects. Compared to popular L1s like Solana, Sui, and Avalanche, its MC/TVL is only 0.3x (the industry average is usually above 1), meaning the current market capitalization has yet to reflect its on-chain economic value.
This data has triggered a division in community sentiment:
Pessimists (FUD): Believe that PoL incentives easily lead to 'mine, withdraw, sell' behavior and worry about long-term price pressure on tokens;
Optimists (Bull): Believe that real transactions and ecological landing driven by PoL will drive prices up with the development of the ecosystem.
The key is whether genuine trading demand can be formed within the ecosystem; otherwise, high APY subsidies may evolve into a 'fund cycle loop.'
The good news is that projects capable of generating genuine trading income have already emerged in this ecosystem:
PuffPaw: Using 'Vape-to-Earn' to incentivize users to quit smoking, combining healthy behavior with token rewards, and has collaborated with over 50 medical institutions in 17 countries;
Projects like Kodiak, Dolomite, Infrared, etc., are promoting real asset trading and continuously growing TVL.
The activity levels and revenue capabilities of such projects are key to solving the 'unsustainable liquidity from subsidies' problem.
Explorations of cold starts in other chains.
When deploying public chains becomes as easy as opening an online store, the core competition shifts to whether it can continuously generate genuine trading demand and fees, rather than relying on subsidies to maintain TVL.
Different chains are seeking breakthroughs through various narratives:
Pharos Network: Focused on RWA (Real World Assets), bringing physical assets on-chain;
Initia: Finding a new path for cold start through sub-chains and ecological fission;
New ecosystems like HyperEVM attract projects to supplement their trading volume through multi-chain deployment.
These explorations all point to the same question: a chain without genuine transactions will eventually see subsidies dry up; only when there are users, payment, and funds willing to stay on-chain can the chain truly start its flywheel.
Final thoughts.
The simplification of DeFi operations and lowering of entry barriers is indeed the necessary path for more people to participate in blockchain. However, this path cannot rely solely on 'allowing one-click interactions'; it must also be supplemented by user education, transparent risk control, and a sustainable economic model driven by genuine demand within the ecosystem.
Otherwise, the convenience of 'allowing everyone to interact with one click' might only turn into a disaster of 'one click to lose everything.'
Just like everyone who runs an online store knows, giving out red envelopes can attract new customers, but what really sustains the business is the ability to retain loyal customers who are willing to repurchase. The same goes for building a chain: users must feel confident to use, be able to use, understand how to use, and continuously generate transactions—this is the true beginning of a public chain's cold start.
