DeFi for Dummies: From "One-Click Interaction" to Real Cold Start, How Can the Chain Break Through?

In the world of cryptocurrency, there is a commonly overlooked truth: “The simpler, the more dangerous.” As DeFi has developed to this day, it is heading towards “foolproof operation”: 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, the Shogun SDK can compress DeFi operations that originally required multiple steps of signing, authorization, and transfers into a single click, making its debut in the Berachain ecosystem.

Sounds perfect: who wouldn’t want to complete on-chain operations as easily as scanning with Alipay? But the problem is that these “no-threshold tools” also hide the complex on-chain risks. Just like someone going crazy with credit card overdrafts after getting a credit card, the issue isn’t with the credit card itself but with the fact that they don’t realize overdrafts need to be paid back. In Decentralized Finance, once you authorize a contract to manage your assets, it may permanently control your entire balance in your wallet; for beginners lacking awareness, casually clicking “authorize all assets” could be the beginning of a “one-click liquidation.”

Behind the convenience, there lies a huge trap:

• Clicking “Authorize All Assets” is like handing your bank card and password over to a stranger permanently.
• Behind the high-yield promotions, there may be risks such as 100% slippage, hidden traps in the liquidity pool, etc.
• Most users are unaware 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 accidentally clicking a phishing link - the process was as simple as scanning a QR code for payment, but it led to devastating consequences.

Why are all chains pursuing “foolproof interaction”?

The reason is simple: on-chain interactions are just too complex and extremely unfriendly to newcomers. You need to download a wallet, manage mnemonic phrases, understand Gas fees, learn about cross-chain bridges, understand token conversions, comprehend contract risks, click authorizations, and complete signatures… Any mistake in any of these steps could lead to asset loss, and even after the operations are completed, you still need to pay attention to whether the interactions were successful, whether you need to revoke authorizations, and other follow-up actions.

For Web2 users without a technical background, the learning cost is akin to having to learn a new language just to make payments on their phones. To allow them to seamlessly enter the on-chain world, the “technological mountain” must first be leveled. Thus, interactive tools like Shogun SDK have emerged: condensing on-chain operations that originally required 100 steps into 1 step, reducing the user experience from “expert-level operations” to the simplicity of “Alipay scanning.”

From a broader ecological perspective, infrastructures such as RaaS (Rollup-as-a-Service) and one-click chain deployment are becoming increasingly mature. In the past, deploying a chain required writing underlying code, deploying consensus mechanisms, building browsers, and creating front-end pages, which could take several months of development. Now, with services like Conduit, Caldera, and AltLayer, a usable EVM-compatible chain can be delivered within weeks, and it can even assist in providing governance tokens, economic models, and block explorers, making it as simple as opening a Taobao 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 a low technical threshold does not equal an easy cold start.

Many people mistakenly believe that “being able to quickly build a chain” means success. In fact, the biggest problem with cold starts is not “can it be done,” but rather “is there anyone using it?” Technology is just a stepping stone; the key to whether a chain can survive is whether it can accumulate real and sustainable user behavior.

Subsidies and airdrops can indeed bring a large number of users and TVL in the early stages, just like how a milk tea shop can attract people to line up across the street with free events— but once the subsidies stop, it’s like the milk tea returning to its original price; if the product itself is not tasty and the service is poor, consumers will turn away, and the queue will disappear in an instant.

The situation on-chain is the same: many new chains appear to have very high TVL during the subsidy period, but most of it is just project teams, foundations, or institutions pledging money to each other, creating a false data facade, and the real number of users and trading volume has not increased. Once the subsidies and high APY end, liquidity retreats like the tide, on-chain trading volume plummets, and TVL evaporates.

Worse still, if there is a lack of genuine trading demand on the chain, subsidy-driven funds will only create a short-term arbitrage cycle—users aim to “take advantage and leave” rather than use applications on the chain and form an ecological closed loop. The higher the subsidy, the more speculative funds there are; once the subsidy stops, the withdrawal 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 the chain to consume, trade, and participate in the community—this is the starting point for a public chain to enter a virtuous cycle.

Taking PoL as an example: How does the chain incentivize the 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 allocates the chain’s inflation rewards to users providing liquidity, using incentives to drive real economic activities on the chain.

A real-life example: Traditional PoS public chains are like rewarding company shares to data centers (nodes) for server maintenance; whereas Berachain directly distributes the shares to you—as long as you provide liquidity to protocols such as DEX, lending, and LST on Berachain, you can continuously receive rewards.

What’s even more interesting is Berachain’s three-token system design:

• BERA: The native token of the mainnet, responsible for paying Gas fees and serving as the primary medium for PoL rewards.
• HONEY: A stablecoin within the ecosystem, used for trading, lending, and more;
• BGT: Governance token that can be used to participate in voting or earn additional rewards through staking.

The interaction of the three currencies forms a “Earn - Use - Govern” flywheel, promoting the retention of funds on the chain while enhancing governance participation.

From the data, Berachain’s mainnet has been live for only 5 months, with a TVL nearing $600 million and over 150 active native projects. Compared to popular L1s like Solana, Sui, and Avalanche, its MC/TVL ratio is only 0.3x (the industry average is usually above 1), indicating that the current market capitalization has not yet reflected its on-chain economic value.

This data has triggered a division of sentiment within the community:

• Pessimists (FUD): believe that PoL incentives can easily lead to “mining, withdrawing, and selling,” and are concerned that the long-term price of the token will be under pressure.
• Bull: Believes that real transactions and ecological implementation driven by PoL will drive prices higher as the ecosystem develops.

The key is whether real trading demand can be formed in the ecosystem; otherwise, high APY subsidies may evolve into a “funding cycle.”

Fortunately, projects that can bring real trading income have already appeared in this ecosystem:

• PuffPaw: Incentivizes users to quit smoking with “Vape-to-Earn”, combining healthy behavior with token rewards, and has partnered with over 50 medical institutions in 17 countries.
• Projects like Kodiak, Dolomite, and Infrared DEX, lending, and LST are driving real asset trading and continuously increasing TVL.

The activity and revenue capability of such projects are key to solving the “unsustainable subsidy liquidity” problem.

Exploration of cold start on other chains

When deploying a public chain becomes as easy as opening an online store, the core of competition becomes: whether it can continuously generate real transaction demand and fees, rather than relying on subsidies to maintain TVL.

Different chains are seeking breakthroughs with different narratives:

• Pharos Network: Focused on RWA (Real World Assets), bringing physical assets on-chain;
• Initia: Exploring new paths in cold start through subchain feedback and ecological fission.
• New ecosystems like HyperEVM attract projects to supplement their own trading volume through multi-chain deployment.

These explorations all point to the same question: without a chain with real transactions, subsidies will eventually run out; only when there are users, when people are willing to pay, and when funds are willing to stay on the chain, can the chain truly kickstart the flywheel.

Final Thoughts

The simplification of DeFi operations and the reduction of thresholds are indeed essential for enabling more people to participate in blockchain. However, this path cannot rely solely on “one-click interactions”; it must also be supported by user education, transparent risk control, and a sustainable economic model driven by real demand within the ecosystem.

Otherwise, the convenience of “allowing everyone to interact with one click” may only turn into a disaster of “losing everything with one click.”

Just like people who open online stores know that sending red envelopes can attract new customers, what truly sustains a business is retaining old customers who are willing to repurchase. The construction of a blockchain is similar: to make users feel safe using it, able to use it, and understand it clearly, and to continuously generate transactions, is the true beginning of the public chain’s cold start.

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