Berachain: An Innovative Public Chain for Liquidity Proof Mechanism

Berachain is an EVM-compatible L1 public chain focused on DeFi, launched at the end of 2021. It is built on the Cosmos SDK and employs an innovative Liquidity Proof ( PoL ) consensus mechanism.

Project Origin and Development

Berachain originated from the Bong Bears NFT series launched in August 2021. After experiencing the ups and downs of the cryptocurrency market, the project team deeply recognized the importance of Liquidity to DeFi, and thus decided to design an L1 public chain focused on solving liquidity issues.

In November 2023, Berachain began internal testing. On January 11, 2024, the public testnet "Artio" will officially launch, with over 30 native protocols currently under development. It is rumored that the Berachain mainnet will go live in the second quarter of 2024.

Technical Features

Berachain is built on Polaris EVM, which is an EVM-based operating system running on top of the Cosmos SDK. Polaris EVM has the following advantages:

1. Developer-friendly for Ethereum, easy to attract EVM ecosystem developers
2. Achieve powerful cross-chain interoperability through the IBC protocol

Liquidity Proof ( PoL ) Mechanism

PoL is the core innovation of Berachain, aimed at solving the on-chain 流动性 problem:

1. Users provide liquidity to the native DEX to obtain BGT( governance tokens )
2. Users delegate BGT to validators for block production.
3. The entrustor and the validator receive BERA and HONEY rewards.
4. Validators can vote on BGT inflation.

Compared to traditional PoS, the PoL mechanism has the following advantages:

• Incentivize liquidity while enhancing security
• Inflation distribution is more decentralized
• Coordinate the relationship between asset issuance agreements and validators

Three-token economic model

Berachain adopts a three-token model:

• BGT: Governance token, non-transferable, only obtainable through providing Liquidity.
• BERA: Gas token, obtained by burning BGT 1:1 or as a validation reward.
• HONEY: Native over-collateralized stablecoin, serving as a medium for protocol revenue distribution.

This model further stimulates the liquidity of the ecosystem by separating governance rights and Gas fees, and supporting a diversity of staking assets.

Ecosystem Overview

The Berachain ecosystem is rapidly developing, with major projects including:

• the honey jar: ecological entrance and community center
• Beradrome: DEX and Restaking Liquidity Market
• Beradoge: A highly regarded Meme project
• Sudoswap: Cross-chain NFT AMM Liquidity Market
• Beramonium: On-chain gaming project
• Redacted Cartel: DeFi Yield Protocol

Outlook

Berachain's innovative design is expected to lead a new wave of DeFi, creating an ecosystem with high Liquidity and high capital efficiency. With the growth in user numbers and an increase in transaction fee revenue, it is anticipated that more users and projects will be attracted, forming a virtuous cycle.

However, the success of Berachain still depends on factors such as the future development of the project, the expansion of the ecosystem, and the security of the protocol. Investors and users should remain rational and closely monitor the project's progress.