How Beraborrow utilises Proof of Liquidity

Deep liquidity is crucial for Beraborrow, as it maximises the platform's offerings by minimising slippage when users engage in looping strategies. We've implemented several mechanisms, such as flywheels that tap into PoL, to deepen the liquidity for $NECT. These accumulate voting power, which is then used to direct more rewards to $NECT LPs, further incentivising liquidity. This cycle of liquidity deepening and incentivising repeats.

$NECTis a composable version of PoL, allowing any LP containing$NECTto be auto-compounded while retaining exposure and governance power through BGT. Since BGT emissions can be staked via iBGT to earn additional yield, $NECTcan be deposited back into the LP, increasing the initial position. This composability uniquely positions Beraborrow to capitalise on PoL, effectively capturing PoL emissions and transforming emissions into more$NECT. This creates a sustainable flywheel that frees up capital while maintaining the ability to participate in governance. Bootstrapping: $NECT/iBGT flywheel - auto-compounding with no sell pressure. $NECT is essentially a dollar-pegged, wrapped, staked, stable version of iBGT. When BGT is emitted on the $NECT/iBGT LP pool, these emissions can be captured through Infrared and deposited back into Beraborow to mint more $NECT, then pairing that $NECT with iBGT and depositing it back into the LP.

This mechanism thickens liquidity by continuously increasing the initial position in the $NECT/iBGT liquidity pool, without having to sell either asset and earning siBGT emissions on the iBGT in Beraborrow used to mint $NECT.