Author: Brother Yixiu

Let’s talk about a “boring” project BoringDAO today.

Because the name of the project, Boring, will inevitably make people laugh, but in this way, it will make people interested in this project. What is the reason for giving your project a "boring" name?

It turns out that the name Boring is a tribute to Elon Musk's founding of the tunnel company (Boring Company). In the physical world, Elon Musk created tunnels to facilitate people to travel between cities in a short period of time; in the encrypted world, BoringDAO hopes to build tunnels for all digital assets to help them flow seamlessly and freely.

What problem does BoringDAO solve?

We know that the ecology of Ethereum and EOS is very prosperous, especially Ethereum, but their ecology is separated.

Take the past wave of DeFi as an example, Ethereum has the highest participation rate. EOS users cannot participate in the ecology of Ethereum, and vice versa. For Bitcoin holders, it is even more impossible to participate.

However, according to data from CMC, an encrypted digital currency market website, as of the time of writing, the global cryptocurrency market value is 432.13 billion U.S. dollars, of which Bitcoin has a market value of 277.31 billion U.S. dollars, accounting for 64% of the entire encrypted digital currency market.

If Bitcoin and other assets on the chain can be added to the DeFi market, it is expected that the second phase of the DeFi boom will emerge.

What BoringDAO has to do is to convert assets on other chains into ERC-20 assets on Ethereum through a concept called tunneling, so that they can participate in DeFi on Ethereum.

Seeing this picture, you will say, this is the same as other mechanisms such as WBTC, isn’t it just an asset cross-chain? nothing special.

In fact, BoringDAO provides not only a Token cross-chain capability, but also a complete set of solutions from asset exchange to governance. Asset cross-chain is only the starting point.

Let's see how it works below.

How does BoringDAO work?

In order to make this mechanism work, BoringDAO issued its token: BOR. The total amount of BOR is 200,000 pieces.

BOR is used in all aspects of the entire BoringDAO system. Assets mapped on BoringDAO are called o assets, for example, BTC is mapped to oBTC, and BSV is mapped to oBSV.

create tunnel

There is a concept in BoringDAO: "tunnel". For each blockchain asset, there will be a dedicated minting tunnel that operates in the form of a DAO and performs two-way mapping between blockchain assets and ERC-20 tokens.

Any community user can freely create new tunnels by staking BOR, but there can only be one tunnel per cryptocurrency.

Take a chestnut.

Alice hopes to wrap BSV into oBSV on the Ethereum network, but the BoringDAO system has not yet created a tunnel for BSV. Then, Alice can pledge a certain amount of BOR to create a BSV-oBSV wrapping tunnel.

How much BOR is pledged can create a tunnel, and the community proposal vote has the final say.

Activate the "tunnel"

Although the tunnel has been created, it needs community approval before it can be used. How to recognize?

The BOR token holders in the BoringDAO community believe that BSV is a high-quality asset, and they will pledge enough BOR (or other assets recognized by the community) that meet the requirements for activating the tunnel as a deposit. At this time, the tunnel is activated and can be Open to traffic.

These token holders who pledge assets for the tunnel become tunnel operators (Tunnel Operators). In return, they collect the commission generated by minting oBTC through the tunnel as income, just like collecting tunnel tolls.

Note that the threshold deposit required to activate the tunnel is also a parameter, which is decided through community proposal voting.

The benefits brought by this are obvious, those low-quality Tokens are difficult to be activated. Because the usage rate of these Tokens is low, there is less demand for casting oTokens through the tunnel, so BOR pledgers get less income, thus providing a method to filter low-quality Tokens through the incentive mechanism.

overall workflow

• Alice pledges a certain amount of BOR to create a BSV-oBSV packaging tunnel BSV Tunnel.

• BOR token holders (Tunnel Operators, tunnel operators) pledge BOR to activate the tunnel and obtain the right to operate the tunnel.

• Users Bob and Charlie transfer to BSV and exchange oBSV through BSV Tunnel.

• The tunnel operator receives a handling fee as revenue.

How to make this process work

Facing the process mentioned above, as a new project, how to attract people to it and make it run quickly? We will answer a few questions step by step:

1. What motivates Alice to create a tunnel?

TA may be a member of the community or a project party. In short, TA hopes that the usage rate of this Token will increase.

2. How to attract BOR holders to participate?

Give them attractive financial incentives. Therefore, in BoringDAO, users need to pay a handling fee of 0.2% of their asset value when minting and redeeming coins. To whom are these fees paid? 70% of this will go to the tunnel operator.

3. How to attract users to mint coins?

The user's minting transaction volume largely determines the income of BOR holders. As mentioned above, users have costs when minting and redeeming coins. So how to motivate users to mint coins?

In BoringDAO, when users mint coins, they will get additional BOR. This process is called coin mining. When users have income in BoringDAO, users will come in to mine.

Let's talk about the thing that everyone cares about most - where are the opportunities for the first mine!

BoringDAO’s Top Miner Opportunity

In this system, 60% of BOR is distributed through mining. in,

• "Coin Mining" produces 30% of BOR (60,000 pieces);

• Boring Farm produces 30% of BOR (60,000 pieces);

Let’s look at the first one first. The mining formula for minting mining is as follows:

m is the minting fee, which is currently initially 0.2%. Amount is the amount of assets to be minted, and Reduction Factor is the production reduction factor. It is precisely because of this production reduction factor that there is a saying of the first mine.

At a certain point during the first mining period, Alice mints 10 oBTC, the current price of BTC is 12,000 USDT, and the current price of BOR is 100 USDT, so the amount of BOR that Alice can mint this time is as follows:

• Expenditure BOR: 2.4 BOR, only unilateral minting fee.

• Mined BOR: 4.8 BOR.

see it? During the first mining period, everyone mints and redeems coins in BoringDAO, which is equivalent to free.

But free is not enough, there is no profit, why should users put their own assets on BoringDAO? Boring Farm comes in handy.

In the above example, Alice minted 10 oBTC through the tunnel, but there was no oBTC scene in the early stage, and oBTC assets were temporarily unable to participate in other DeFi mining. Alice can stake her oBTC assets in Boring Farm to obtain BOR dividends.

In addition, according to its white paper, Boring Farm will also provide several pools for "farming":

• Before the tunnel is activated, different BORs can be obtained according to the proportion of pledged assets.

• BOR can also be obtained by depositing the liquidity token of the BOR/ETH trading pair on Uniswap/Balancer/DODO/Curve.

• other pools.

From this point of view, there are still some opportunities for BoringDAO's first mine, but there is still a problem: are the assets placed in BoringDAO safe?

BoringDAO attaches great importance to the security of assets, and it has carefully designed a two-layer pledge model to ensure the security of user assets as much as possible.

In simple terms, each bToken is protected by a two-layer pledge model and has approximately 200%+ collateral. in:

• 100% composed of assets from the native blockchain;

• About 100% consists of assets mortgaged by the tunnel contract layer.

Precautions

Precautions

When participating in the mining of BoringDAO, there are several parameters to pay attention to:

The formula for minting coins and mining coins

When other conditions remain the same, the lower the price of BOR, the more BOR will be obtained by minting. If the price of BOR doubles, the amount of BOR minted will be halved.

Production reduction coefficient during coin mining

The production reduction coefficient is related to the supply. Every time 10,000 BORs are successfully mined, the production reduction coefficient will be adjusted. The initial value of the production reduction coefficient is 100%, and the new production reduction coefficient is 80% of the previous production reduction coefficient. After the production reduction, you need to re-evaluate the mining income and decide whether to continue to participate.

summary

https://cn.etherscan.com/token/0x3c9d6c1c73b31c837832c72e04d3152f051fc1a9#balances

summary

Today we talked about a "boring" project BoringDAO, which is an asset bridging system for DeFi.

Different from other asset cross-chain projects, BoringDAO provides a set of incentive mechanisms and a DAO governance model. At the same time, it uses the mechanism of double-layer mortgage and insurance fund pool to allow users to join the system while ensuring the safety of users' assets to the greatest extent.

Finally, we talked about the top mining opportunities in BoringDAO and the precautions. I hope it will be helpful to you.