Protocol-Owned Liquidity (POL)

To establish a sustainable liquidity foundation, the protocol will deploy protocol-owned liquidity (POL) to farm the $BFD-$HONEY liquidity pool. The key reason for this approach is to incentivize validators by offering unbacked $BFD as bribes. However, to maintain the integrity of the ecosystem, the value of these unbacked tokens must be recaptured by farming a portion of the boosted $BGT emissions generated by these bribes.

Steps to Set Up the $BFD-$HONEY Pool with Protocol-Owned Liquidity

Issuing Initial Liquidity

To create the $BFD-$HONEY liquidity pool with POL, we first need to issue additional $BFD tokens. However, we must ensure that the token supply remains properly backed.

EXAMPLE:

• Suppose we are selling 5 million $BFD tokens at the initial Gathering.

• 500k $BFD will be sold at team at $1 per token, generating $500,000 USDC

• 2 million $BFD will be sold in a WL sale at $1.03 per token, generating $2,060,000 USDC.

• 2.5 million $BFD will be sold in a Public sale at $1.06 per token, generating $2,650,000 USDC

total proceeds from selling 5 million $BFD tokens = $5,210,000 USDC

Maintaining Full Backing with Additional Minting

• To keep the 1:1 backing intact, we will mint an additional 210,000 $BFD tokens to match the surplus buffer.

• These newly minted tokens will be used to establish protocol-owned liquidity in the $BFD-$HONEY pool, ensuring stability and long-term sustainability.

This mechanism allows the protocol to fund its own liquidity pool while maintaining a fully backed supply of $BFD, ensuring both economic stability and long-term growth.