Written by: 0xresearch
In the crypto world, there is a frequently overlooked truth: 'The simpler, the more dangerous'. As DeFi has developed to today, it is rushing towards 'foolproof operations': Don’t know how to use contracts? Don’t understand blockchain? No problem, various SDKs, aggregators, and wallet plugins have encapsulated complex on-chain operations into 'one-click interactions'. For example, Shogun SDK can compress DeFi operations that originally required multiple steps of signatures, authorizations, and transfers into a single click, launching directly within the Berachain ecosystem.
It sounds perfect: who wouldn't want to complete on-chain operations as easily as scanning a code with Alipay? The problem is that these 'barrier-free tools' also hide complex on-chain risks. Just like someone wildly overspending after getting a credit card, the issue isn’t the credit card itself, but that they don’t understand that overspending has to be paid back. In DeFi, once you authorize a contract to manage assets, it may permanently control your entire wallet balance; for novices lacking awareness, casually clicking 'authorize all assets' might just become the beginning of 'one-click liquidation'.
Behind the convenience lies a huge trap:
Clicking 'authorize all assets' is like permanently handing your bank card and password over to a stranger;
Behind the high-yield promotion, there may be risks such as 100% slippage and hidden pitfalls in the fund pool;
Most users do not realize that certain contract authorizations can allow others to control your wallet indefinitely;
Real case: In 2023, a user accidentally clicked a phishing link and lost $180,000 within 2 minutes—the operation was as simple as scanning a code to pay, yet it led to devastating consequences.
Why are all chains pursuing 'foolproof interactions'?
The reason is simple: on-chain interactions are extremely complex and very unfriendly to newcomers. You need to download a wallet, manage mnemonic phrases, understand gas fees, learn about cross-chain bridges, comprehend token conversions, recognize contract risks, click authorizations, and complete signatures… Any mistake in these steps could lead to asset loss, and even if the operation is completed, you must pay attention to whether the interaction succeeded and if you need to revoke authorizations and other follow-up actions.
For Web2 users without a technical background, the learning cost is like having to learn a new language to use a smartphone for payment. To allow them to seamlessly enter the on-chain world, the 'technological mountain' must first be flattened. Thus, interactive tools like Shogun SDK emerge: condensing on-chain operations that originally required 100 steps into 1 step, bringing user experience from 'expert-level operation' down to the simplicity of 'Alipay scanning a code'.
From a broader ecological perspective, infrastructures such as RaaS (Rollup-as-a-Service) and one-click chain deployment are also maturing. Previously, deploying a chain required writing underlying code, deploying consensus mechanisms, building a browser, and creating front-end pages, often taking months of development. Now, by using services like Conduit, Caldera, and AltLayer, a usable EVM-compatible chain can be delivered in weeks, even helping you configure governance tokens, economic models, and block explorers, making it as simple as opening an online store. This allows any project party, community, or even individual hackathon teams to 'start a chain business', truly realizing the 'democratization' of on-chain entrepreneurship.
But low technical barriers ≠ easy cold starts
Many people mistakenly believe that 'quickly setting up a chain' means success; in fact, the biggest problem with cold starts is not 'can it be done', but 'are there people using it'. Technology is just a stepping stone; accumulating real, sustainable user behavior is the key to whether a chain can survive.
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 line up across the street with free activities—but once the subsidies stop, it's like the milk tea returns to its original price; if the product itself doesn’t taste good and the service is poor, consumers will turn away, and the line will disappear instantly.
The situation on-chain is similar: many new chains appear to have very high TVL during the subsidy period, but most of it consists of money from project parties, foundations, or institutions pledging to each other, creating a false data appearance, while the actual number of users and transaction volume has not increased. Once subsidies and high APYs end, liquidity retreats like the tide, leading to a sharp drop in on-chain transaction volume and evaporating TVL.
Worse yet, if there is a lack of real transaction demand on-chain, subsidy-driven funds will only form a short-term arbitrage cycle—users' goal is 'to take and leave', rather than using applications on-chain and forming an ecological closed loop. The higher the subsidies, the more speculative funds there are; once the subsidies stop, 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 continue staying on the chain for consumption, trading, and participating in the community—this is the starting point for public chains to enter a virtuous cycle.
Taking PoL as an example: How does the chain incentivize real economy?
Among many new chains, Berachain has made interesting explorations. It pioneered the PoL (Proof of Liquidity) mechanism—unlike traditional PoS which distributes rewards to nodes, PoL directly distributes the chain's inflation rewards to users providing liquidity, driving real economic behavior on-chain through incentives.
To give a relatable example: traditional PoS public chains are like rewarding server maintenance to the data center (nodes) for operating servers; whereas Berachain directly distributes shares to you—as long as you provide liquidity by investing assets into DEX, lending, LST, and other protocols on Berachain, you can continuously earn rewards.
Even more interesting is Berachain's three-coin system design:
BERA: The native token of the mainnet, responsible for paying gas fees, while also serving as the main carrier of PoL rewards;
HONEY: A stablecoin within the ecosystem, used for trading, lending, etc.;
BGT: Governance token, can participate in voting or earn additional rewards through locking.
Three coins interact, forming a flywheel of 'earn - use - governance', keeping funds on the chain while enhancing governance participation.
From the data, Berachain's mainnet has been online for only 5 months, with TVL approaching $600 million and over 150 native projects active. Compared to popular L1s like Solana, Sui, and Avalanche, its MC/TVL is only 0.3x (the industry average is usually above 1), indicating that the current market cap has not yet reflected its on-chain economic value.
This data has led to a division in community sentiment:
Pessimists (FUD): believe that PoL incentives can easily lead to 'mining-extraction-selling', worrying about long-term price pressure on tokens;
Optimists (Bull): believe that real transactions and ecological implementation driven by PoL will cause the price to rise with the development of the ecosystem.
The key is whether real transaction demand can form within the ecosystem; otherwise, high APY subsidies may evolve into 'funding cycle'.
Fortunately, projects that can bring real transaction revenue have already emerged in this ecosystem:
PuffPaw: Encourages users to quit smoking using 'Vape-to-Earn', combining healthy behavior with token rewards, and has already collaborated with over 50 medical institutions in 17 countries;
Projects like Kodiak, Dolomite, Infrared, and others are promoting real asset trading, continuously growing TVL.
The activity and revenue capacity of such projects are key to solving the issue of 'unsustainable subsidy-driven liquidity'.
Explorations of cold starts in other chains
When deploying public chains becomes as easy as opening an online store, the core competition transforms into: whether real transaction demand and fees can be generated sustainably, rather than relying on subsidies to maintain TVL.
Different chains are seeking breakthroughs through different narratives:
Pharos Network: Focuses on RWA (Real World Assets), bringing physical assets onto the chain;
Initia: Finds a different path for cold starts through sub-chains and ecological fission;
New ecosystems like HyperEVM attract projects to supplement their own transaction volume through multi-chain deployments.
All these explorations point to the same question: A chain without real transactions will eventually see subsidies run dry; only when there are users, payments, and funds willing to stay on the chain can the flywheel truly start.
Final thoughts
Simplifying DeFi operations and lowering barriers is indeed the path for more people to participate in blockchain. However, this path cannot rely solely on 'one-click interactions'; it must also be accompanied by user education, transparent risk control, and sustainable economic models driven by real demand within the ecosystem.
Otherwise, the convenience of 'one-click interaction for everyone' may only turn into a disaster of 'one-click loss'.
Just like those who open online stores know that issuing red envelopes can attract new customers, what truly sustains the business is the ability to retain loyal customers willing to repurchase. The construction of a chain is similar: to make users willing to use, able to use, and understand how to use it, and continue generating transactions, is the true beginning of a public chain's cold start.
