Bitcoin was originally designed as a peer-to-peer cash system, as Satoshi Nakamoto’s whitepaper outlined. However, the economic landscape shifted over time, leading to Bitcoin being viewed more as “digital gold” than a daily transactional currency. This shift has become profit-driven models, which led to the emergence of new cash system standards, diverging from Bitcoin’s foundational principles. Because of Bitcoin’s scalability and functionality, it’s hard to utilize as Ethereum or Solana, resulting in the development of new token standards that “live and move” on Bitcoin. BRC20, Ordinals, and Runes are examples of such token standards. These standards allow fungible and non-fungible tokens (NFT-like assets) to be created and transferred on Bitcoin without smart contracts. Since these tokens are gaining popularity, various projects like BeFi Lab are being utilized on their marketplace.

What is BeFi Lab?

BeFi Lab is a decentralized exchange powered by the BTCfi ecosystem that offers users spot and perpetual trading (up to 60x leverage), liquidity pools, and staking for its $BEFI token. BeFi Lab aims to bring as many people into the BTCfi ecosystem as possible, promoting inclusivity and accessibility. By cutting fees and eliminating unnecessary complexities with user-friendly platforms. The BeFi Lab has integrated leading wallets like MetaMask, SafePal, Trust Wallet and Phantom, as well as chains including Bitcoin, Ethereum, and over 10 L2s, connecting the entire Web3 space to Bitcoin’s token economy.

BeFi Labs Background

​BeFi Labs has established several strategic partnerships to enhance its decentralized finance offerings with wider users to provide a seamless, secure, and efficient trading experience. Some notable partnerships include ShatoshiVM, Hope Money, PortalSwap, MetaMask, Trust Wallet, Unisat, and Phanom Wallet. The BeFi Labs was founded in early 2023, but the team behind BeFi Labs is still not public. Despite extensive research, no specific individuals have been publicly identified as the founders of BeFi Labs. Despite no public appearance, BeFi Labs successfully raised over $9.61 million through various fundraising platforms, including Gate.io Startup. The most recent funding date was 24 March 2024.

BeFi Labs Architecture

As a part of architecture, BeFi Labs has integrated some components to enhance the overall functionality of the platform that addresses common challenges in the DeFi space, such as security vulnerabilities, liquidity fragmentation, and cross-chain interoperability. The key components of its architecture include:​

Zero-Knowledge (ZK)

Zk-knowledge helps to prove the integrity of the platform and allows anyone to verify the trustworthiness of blockchain. This verification process is crucial for maintaining user trust, as it transparently demonstrates that the blockchain data, particularly financial transactions, has not been manipulated for fraudulent purposes. BeFi records every cryptographic hash of spot orders, deposits, and withdrawals using the Keccak256 algorithm and is publicly stored on the Ethereum blockchain. The whole records-generating process and off-chain servers perform the following steps:

• Extract the latest hashes from three critical datasets: spot orders, deposits, and withdrawals.
• Combine these hashes using a transparent and secure hashing algorithm (Keccak256).
• Record the resultant hash onto the Ethereum network, recognized for its high security and reliability.

Validator Scheme

BeFi Labs’ Validator Scheme enhances withdrawal security through a multi-layered verification process. It is meticulously engineered to safeguard against any vector of compromise, thereby cementing user trust and maintaining the integrity of the transactional ecosystem. It has four critical components that continuously monitor the blockchain for withdrawal requests, which include:

• Withdraw Signing API: The withdrawal authorization process starts here and continuously scans for new withdrawal requests and protects unauthorized transactions.
• Validation Process: Multiple independent validators, known as Validator N, Validator N+1, and Validator N+2, continually guard the system and search for new withdrawal requests that verify transactions using separate data repositories.
• Verification: Upon detection of a new withdrawal request, each validator engages in a meticulous verification process. Utilizing its separately stored order data, the validator ascertains the legitimacy of the request against a backdrop of historical order data.
• Confirmation: After affirmative validation, the withdrawal process moves to legitimacy confirmation for the digital signature of approval. This signature is the core of transaction legitimacy, ensuring that only validated requests reach the finality of execution. After that, approved requests are digitally signed and securely transmitted back to users via API.

Wallet System

Wallet System allows users to link multiple cryptocurrency wallets, including Bitcoin (BTC) and Ethereum (ETH), to a single BeFi account. Security is ensured through cryptographic signature verification, which proves ownership. This digital signature serves as the linchpin of platform security protocol. The system automatically verifies if a wallet is already linked, avoiding redundant checks. Once integrated, users can fully engage with BeFi’s ecosystem while maintaining secure and efficient asset management.

Local Blockchain

BeFi Labs’ Local Blockchain is a semi-decentralized system designed for efficiency and security, breaking the constraints of the Bitcoin and Ethereum fee structures. It has three layers:

• Immutability Layer: Uses an immutable database where each transaction references the previous one, maintaining chronological integrity. To ensure the users integrity, each transaction carries the user’s signature, validating their consent and the hash of the preceding transaction. ZK proofs are also submitted to the Ethereum network every 8 hours for transparency.
• Validation Layer: Validators monitor transactions for withdrawal requests and trade executions. The main purpose of validators is to verify balances and block unauthorized withdrawals. A withdrawal request can be denied if any unwanted behavior is found.
• Executive Oversight Layer: High-value transactions require manual approval from BeFi’s executives. Transactions exceeding the one million dollar threshold will require additional authentication in the form of signatures from Befi’s C-level executives, adding a human element to the automated validation process. This layer acts as a failsafe, ensuring that high-value transactions receive an extra layer of scrutiny.

Security Framework

Security Framework ensures secure trading by recording transactions on its local blockchain, making them tamper-proof. Withdrawals require approval from four validators, verifying transaction history before authorization. To prevent hacking, validators continuously monitor the system to check any potential hacking attempts, and multisignature contracts add an extra layer of protection by requiring multiple authorized signatures for withdrawals.

Multichain Architecture

In order to provide a better experience, BeFi Labs allows users to access, trade, and monitor their assets across different blockchains effortlessly. The platform supports seamless management and trading across multiple blockchains, including Ethereum, Binance, Solana, and the BRC20 ecosystem. This multichain approach allows users to consolidate and manage assets from different chains within a single interface.

BeFi Labs App

The BeFi Labs app has integrated every trading requirement in a single place. The platform’s user-friendly design simplifies the trading process, allowing users to engage in swaps, perpetual trading, spot trading, staking and providing liquidity with BRC20 tokens.

Swap

A simple feature that allows users to exchange BRC20 tokens for different tokens and chains. To do so, users have to connect their wallet according to the chain; for example, to exchange BEFI tokens, they need MetaMask or Trust Wallet, while for RUNCOIN, they need Phantom or Orange Wallet. On March 12, 2024, BeFi Labs announced that they have integrated PortalSwap for cross-chain trading swaps to access a diverse range of assets. This PortalSwap integration will increase BeFi’s trading pair catalog, extending availability to assets on other chains in a secure manner.

Spot Trade

The BeFi Labs trading feature offers more advanced functionality compared to the swap. Users can access real-time market prices, order books, and trade with a 0.1% fee. This allows for more precise and efficient trading of listed coins.

Perpetual Trade

For high-risk users willing to leverage their profit and loss. This feature allows traders to take both long and short positions, aiming to capitalize on market fluctuations. By providing advanced trading tools and high leverage. Traders can take up to 60x on both ways.

Liquidity Pool

BeFi Liquidity Pools lets anyone add liquidity on BTCfi assets, boost the orderbook, keep the action flowing, and earn fees as the market moves. This liquidity helps spot traders to buy and sell tokens quickly from order books. Liquidity providers need to provide 50%–50% of both tokens. For instance, if the liquidity provider is adding liquidity to the $BEFI/$USDT pair, you must supply both $BEFI and $USDT. Liquidity providers can easily remove their liquidity whenever they are ready, with one click. At this time, 50% of fees are allotted for liquidity providers.

Stake (Reactor)

By staking $BeFi tokens in the Reactor, users unlock a range of benefits within the BTCfi space. From enjoying low-to-zero trading fees and gaining early access to innovative projects to participating in exclusive token airdrops. Staking $BeFi tokens ensures users are at the forefront of Bitcoin’s evolving financial landscape. According to the fee and staking amount, the staking is divided into five tiers as follows:.

What is the BeFi token ($BEFI)?

The BeFi token is a utility token of BeFi Labs that can be used for staking, liquidity, trading, rewards, and paying fees on the platform. The token doesn’t have much utility outside of the platform. However, within the ecosystem, it plays a critical role. The token is already listed on various centralized and decentralized platforms that can be bought with respective pairs. The total supply of tokens is 210 million $BEFI distributed in various sectors as follows:

Source: Cryptorank

How do I buy BeFi tokens?

• Go to Gate.io Exchange and create an account by entering your email ID and password.
• Set up your fund password by entering settings; this password will be asked during fund withdrawal.
• To buy BEFI coins, you must complete KYC with the proper documents.
• After KYC, go to Spot Trade, search for BEFI, and select.
• After opening the new page, fill in the amount in BEFI or USDT you want to buy and click the buy button.
• After a successful buy, go to the Wallet > Withdraw page.
• Here, select BEFI and then enter the wallet address.
• It will ask you for your fund password, 2FA, and email code; enter them correctly and submit.
• Your BEFI will arrive in your wallet after a few confirmations.

Conclusion

Despite lacking public team appearances, BeFi Labs continues to deliver on its promises by maintaining a secure and efficient platform. Determined to create a better experience, BeFi set out to build a solution from first principles that would enhance the trading experience not only for itself but for the millions of BTCfi enthusiasts projected to join in the near future.