NAV Highlights: Goldilocks, Berachain's Winning Lending Hub?

We've got reason to believe @goldilocksmoney could be an integral piece of DeFi infrastructure on Berachain, and we'll explain what they do, and how they do it in this post:

Goldilocks Protocol has 3 main components...

1) Goldiswap, their novel AMM that controls the supply, price, and behavior of LOCKS, their governance token

2) Goldilend, an NFT lending platform specifically for Bong Bear NFTs and their related rebases

3) Goldivaults, vaults that let users trade/speculate on future earnings of yield-bearing positions on Berachain's native DeFi protocols

LOCKS is the key to understanding Goldilocks.

It'll have 2 liquidity pools in its AMM, with the Floor Supporting Liquidity Pool (FSL) and Price Supporting Liquidity Pool (PSL), both comprising of $HONEY (Berachain's native stablecoin).

Users can always redeem LOCKS tokens in exchange for a share of the FSL, with the FSL 'floor price' of LOCKS giving a minimum price for how much LOCKS can be redeemed for.

Users can also sell LOCKS to the AMM at market price, which will always be greater than the floor price. This lets them burn their tokens for a share of the FSL and PSL, and LOCKS can also be bought from the AMM.

LOCKS can be wrapped into govLOCKS at a 1-1 ratio, giving token holders governance power over Goldilocks. LOCKS can also be staked, to be paid in PRG (porridge), a 2nd token.

PRG lets holders buy LOCKS at the floor price, while never letting rewards dilute the floor price of LOCKS, preventing an inflationary spiral of the token.

When LOCKS is staked, users can borrow up to the full floor price of the staked LOCKS. For example, if the floor price is 1 $HONEY, and one has staked 200 LOCKS, one can borrow 200 $HONEY from the FSL. Goldilocks charges a 3% fee for the loan. After that, it's completely interest-free.

The goal of Goldilocks is to unlock liquidity for holders of Berachain-related NFTs. While they'll start with Bong Bear NFTs and their rebases, Goldilocks is partnering with other Berachain projects to give their NFTs utility with Goldilend.

LOCKS holders will vote on a fair valuation for each NFT collection in the Bong Bear series, denominated in iBGT, the liquid staking token of @InfraredFinance for Berachain's BGT. iBGT is backed 1:1 to BGT.

With loans denominated in iBGT, the only situation Goldilocks may have debt exceeding the value of the collateral used would be iBGT increasing in value against the floor value of Bong Bear NFTs and rebases.

The initial NFT valuations will be below the current floor prices of NFTs at launch and the values of their likely airdrops, protecting liquidity providers for the loans.

Borrowers can borrow up to the full valuation of their NFTs, even with multiple ones in a single loan, allowing holders to gain liquidity against their assets. The interest/APR of the loan is based on the amount borrowed compared to the NFT value, and the amount of NFTs used for the loan.

4.5% of all interest payments paid to Goldilocks will be sent to the DAO treasury, and 0.5% to the ApDAO treasury.

iBGT can be locked for GiBGT (1:1 iBGT/GiBGT) on Goldilocks permanently without withdrawal, representing ownership of a portion of the Goldilocks lending pool.

This incentives GiBGT/iBGT liquidity for lenders to trade in/out of their GiBGT, and Goldilocks may partner with other lending platforms to allow GiBGT as collateral, allowing lenders to remain liquid while enjoying autocompounding increase in GiBGT valuations without liquidating their positions.

GiBGT stakers also have the first opportunity to liquidate overdue loans, thus being able to buy collateral below market price (Imagine a Bong Bear at a hefty discount!)

GiBGT stakers will also be given generous PRG emissions for the first 12 months after Goldilocks launches.

Finally, Goldilocks' yield-splitting vaults let users trade future earnings of yield-bearing positions on Berachain's native DeFi protocols and infrastructure.

Users will be able to deposit assets into various vaults, and automatically have them become yield bearing positions on supported platforms.

They'll receive ownership tokens in return for the deposited assets, and yield tokens for ownership of the yield the assets generate over the lifetime of the vault.

The tokens can also be traded on partner platforms, unlocking liquidity of the future yield their assets generate.

That's a long analysis on what Goldilocks will do, so let's summarize it...

TL;DR Goldilocks enables sticky liquidity across Berachain.

NFT holders need not sell their Bears for liquidity, but can borrow against them with Goldilend. Goldiswap enables liquidity for LOCKS and PRG, while supporting LOCKS floor price so lenders can borrow against their NFTs. Users interested in speculating on the future earnings of Berachain's native DeFi protocols can deposit assets into vaults, opening up new layers of DeFi for Berachain users to play with.

Goldilocks fills a unique niche in the Berachain ecosystem, giving liquidity to NFT holders with their FSL and PSL mechanisms, while letting depositors use GiBGT across Berachain while locking their iBGT in Goldilocks to support the protocol's liquidity.

If the protocol succeeds, Goldilocks may become the lending hub of Berachain-related NFTs and a mainstay of Berachain DeFi.