Editor's Note: The article introduces the Berachain ecosystem and its innovative Proof-of-Liquidity (PoL) consensus mechanism, emphasizing the rewarding of liquidity providers and validators through user-network interaction. Berachain aims to attract user participation through dynamic inflation and decentralized economic models. The author also outlines several Berachain ecosystem projects, including DeFi applications and NFT series, showcasing the potential and opportunities of this emerging ecosystem.
The following is the original content (edited for readability):
Introduction to Berachain
Berachain is an EVM-compatible Layer 1 blockchain built on the Cosmos SDK and provides security through a new consensus mechanism called Proof-of-Liquidity (PoL).
PoL is similar to Proof-of-Stake (PoS) but taken a step further. Users can interact with applications and participate in DeFi protocols, earning $BGT rewards, a governance token. $BGT can be burned to acquire $BERA, which can then be used for staking.
· The higher the liquidity in a given protocol → the higher the rewards for validators.
· The more generous the rewards → the more validators choose to stake their $BGT in that protocol.
· More $BGT → greater rewards for users.
Protocols are interested in creating their own Gauges (evaluation metrics) and attracting liquidity. The more rewards they allocate to validators, the more their liquidity providers (LPs) can earn in $BGT. As a result, more users want to become the protocol's LPs, buying the project's native token, which also has a positive impact on its price. It's like a pyramid, with each layer covered in a generous sweet honey, ensuring all participants stay active in the process.
Berachain's Three Core Tokens
$BERA—The primary token, which will be traded on exchanges and used for staking.
$BGT—A non-transferable governance token that can only be acquired by burning $BGT in exchange for $BERA. Earned as a reward for contributing to the network.
$HONEY—The network's native stablecoin.
Differences between PoL and PoS
· Proof of Stake (PoS) only rewards users for staking tokens, even if they are not actively participating in the network.
· Proof of Liquidity (PoL) rewards users for their interaction with the network, ensuring fair security compensation and making participation more attractive.
Fast transactions and extremely low fees are no longer appealing—many networks offer similar functionalities, each trying to outdo the other. The real magic is when users have a reason to stay on the platform. This challenge is very difficult, and so far, it seems no one has fully cracked the code.
Blockchains like Solana and Ethereum can only retain users through the third-party developers in their ecosystems. Without DeFi visionaries, who would use Ethereum? Without this meme coin frenzy, who would use Solana?
Berachain attracts users through an economic model where value circulates between applications and the network—ultimately, this value comes back to you in the form of rewards.
Most PoS networks suffer from fixed inflation—it's like paying security guards for an empty store. Berachain solves this problem by introducing dynamic inflation, adjusting rewards based on actual demand.
Comparison of PoS and PoL
In a PoS system, users must choose between staking tokens for network security and using them in DeFi to generate additional value. PoL separates these functions into two different tokens:
$BERA: Ensures network security and is used as a fuel fee.
$BGT: Used for rewards, delegating to validators, and governance voting. It can only be earned by staking $BERA as a validator or depositing assets into the rewards pool. Validators stake BERA to earn BGT rewards. The more capital locked, the more rewards they receive.
Is Berachain Only for Liquidity Providers?
Users do not need to lock BERA with validators. Instead, they can participate in ecosystem applications, earn "checks" for their activity, and deposit them into the rewards pool to receive BGT.
· Can be any token.
· No creative restrictions for projects.
· "Checks" can be earned through any activity—you don't even need to provide liquidity.
Projects can simply allocate "checks" by having users interact with their applications. Validators receive rewards in the form of BGT, but most of the rewards go into the rewards pool (similar to a savings account) and are then redistributed to users. Protocols can stake BGT on behalf of their users, encouraging more participation.
Where Can Proof of Liquidity Be Applied?
· Decentralized Exchanges (DEXs):
Unlike traditional token incentives, DEXs can allow users to earn BGT through validators, reducing the risk for participants.
· Real-World Assets (RWAs):
PoL can be used to incentivize the tokenization of assets, such as real estate. Users can earn BGT by discovering favorable trades or interacting with the platform.
· Layer 2 on the Berachain Stack:
Applications requiring high throughput can launch their own L2 on Berachain while maintaining access to PoL.
Investors: Polychain Capital, Framework Ventures, Brevan Howard Digital, and others have invested $142M, along with smaller funds like Shima Capital and Tribe Capital.
Website—https://www.berachain.com/
Twitter—https://twitter.com/berachain
Discord—https://discord.com/invite/berachain
Docs—https://docs.berachain.com/
Cross-Chain Bridging: Berachain has partnered with LayerZero to create a native bridge from any L2 network. Official bridge link: Click here.
Projects Worth Watching
Next, we'll take a look at the most interesting projects and try to answer a key question—what to do?
Some projects are rushing to launch tokens, while others are gradually progressing through a points system. You can expect project rewards for Discord roles. If you've been actively participating in role activities in the past few years—congratulations, this may lead to a solid airdrop. Projects participating in Boyco will have special tags for easy identification. However, Boyco participants do not receive any major advantages beyond a 2% $BERA reward.
Shogun
Shogun—an intent-based DeFi protocol that connects different blockchains and allows users to swap assets across chains without manually bridging tokens or switching wallets. The protocol uses a hybrid approach: liquidity comes from both CEXs and market makers, as well as DEXs and passive liquidity pools. The project offers multiple trading options and interfaces, including a Telegram bot, mobile/desktop apps, and widgets for other platforms.
Investment: $6.9M, funded by Polychain Capital, dao5, Arrington Capital, and others. Participated in the Build A Bera program.
Suggested Actions: Join the Discord and actively participate in project activities. Create art, write Twitter threads, and post them in the community forums. Your content may be noticed by the team, earning you corresponding roles. You can also participate in project events, such as the poker game today at 3 PM UTC. Through these activities, you can earn Goat or Shogun Oakmont roles.
Wait for the launch of reward activities, which may include a points system and NFT collections.
Kodiak (Boyco)
Kodiak is a decentralized exchange (DEX) on Berachain that provides smart liquidity management. It allows traders to swap tokens quickly, while liquidity providers can automate liquidity pool management and earn incentives without complex operations. The team's main products include: Kodiak DEX for trading, Kodiak Islands for automated liquidity management, Sweetened Islands for participant incentives, and Panda Factory as a launchpad for new tokens. All these features make trading and asset management more seamless within the same ecosystem. The protocol has accumulated $1 billion in deposits and is participating as part of Boyco.
Investment situation: Shima Capital, Kenetic Capital, Amber Group and others invested $2 million. Participated in the Build A Bera project.
Operation suggestions: Wait for the launch of the points system and provide liquidity. The project has no social activities, and roles cannot be obtained through farming. You can deposit funds into the liquidity pool through providers like EtherFi to earn points for multiple projects (including Kodiak).
Infrared (Boyco)
Infrared is a liquid staking protocol that allows users to stake BERA and BGT tokens on the Berachain and receive iBERA and iBGT in return. This allows users to participate in DeFi protocols while earning staking rewards. The project collaborates with validator nodes on the Berachain network and integrates with applications like BeraBorrow (loan supported by iBGT), Timeswap (lending and liquidity), and Kodiak (liquidity pool management).
Investment situation: $2 million, Binance's first investment in the Berachain ecosystem. Participated in the Build A Bera project.
Operation suggestions: Wait for the launch of the points system and PoL incentives, and stake tokens. Join the Discord channel and earn the Illuminance role through active participation or winning Rumble events.
Ramen
Ramen is a decentralized protocol aimed at liquidity management and token launches. The project provides a solution to maximize capital efficiency through a centralized liquidity mechanism on the Ramen DEX and a token launch platform on the Ramen Launchpad. The project uses the veRAMEN token through community governance to decide on liquidity incentives and protocol revenue distribution.
Operation suggestions: $RAMEN sales will require Gacha registration, and the actual private round/Gacha round contribution phase will begin 1-2 days later. In mid-January, there was an NFT holder snapshot, and rewards will be distributed among these holders. We just need to stay tuned and participate in the BGT farm through this protocol.
Beratone (Tasty NFTs)
Beratone is an online P2E (play-to-earn) farming and fishing simulation game for PC and mobile devices. The game is inspired by Stardew Valley and Animal Crossing, providing players with opportunities to explore the world, manage farms, collect resources, customize homes, and interact with other players. The team's goal is to attract casual players who may not be familiar with cryptocurrencies. The game integrates blockchain mechanics, allowing players to earn and trade rare in-game items.
Investment situation: Animoca Brands, SNZ Holding, and others invested $2 million. Participated in the Build A Bera project.
Operation suggestions: The team promises to launch a playable demo soon. Initially, access will be limited to NFT holders. These NFTs are not as expensive as NFTs in other ecosystems before the network launch. Owning these NFTs can unlock the Diamond Paws character and various in-game privileges. You can join the Discord and try to earn different roles:
Collector: Earn the role by purchasing articles.
TonePoster: Earn rewards by posting emojis on Twitter.
BeraVinci: Earn rewards by posting artwork on Twitter.
BasedBera: An extremely important role, manually granted by the team.
Berabot
Berabot is a trading bot on the Berachain, currently only available on the testnet.
Operation suggestions: The project has a collection of 4,200 NFTs, and holders will receive 10% of the project's tokens through airdrops. Additionally, NFT holders will also receive a FCFS whitelist spot for the Steady Teddies collection.
Beraborrow (Boyco; Tasty NFTs)
Beraborrow provides instant liquidity by issuing the stablecoin Nectar ($NECT), fully backed by the network's native assets. Users can deposit Infrared's iBGT (staking derivatives) and LP tokens into specific Dens to mint $NECT and use it within the DeFi ecosystem on Berachain.
Investment situation: Undisclosed amount from Dewhales Capital, Optic Capital, and Hercules Ventures.
Operation suggestions: The project has an NFT collection, but according to Discord information, a snapshot has not yet been taken. It is likely that NFT holders will receive airdrops, although this has not been directly confirmed. However, they mentioned holding these NFTs. An activity based on points is expected to be announced soon, so stay tuned for updates.
Gummi
Gummi is launching a trading terminal designed specifically for the Berachain ecosystem. It will include a customizable trends page to help users quickly discover new trends.
Investment situation: Arrington XRP Capital, Animoca Brands, Cypher Capital, and others invested $2 million. Participated in the Build A Bera project.
Operation suggestions: Wait for the project's launch and reward system. Currently, you can test the application on the testnet, but don't expect to receive rewards for now.
Goldilocks DAO (Boyco)
Goldilocks DAO is a Ponzi-like ecosystem similar to the YES project on Blast, providing DeFi and NFT lending solutions. It consists of three products and three tokens:
Goldiswap: An AMM that manages the price of the LOCKS token, ensuring its minimum price gradually increases, meaning the LOCKS token price will not fall below a certain minimum.
Goldilend: A lending platform that uses blue-chip NFTs as collateral.
Goldivaults: Tokenizes future DeFi yield positions for trading and speculation.
Investment situation: HackVC, Shima Capital, and others invested $1.5 million.
Operation suggestions: The project will launch its tokens when Berachain goes live. In Boyco, it has not generated much enthusiasm and has received a rather moderate TVL. This is understandable, as it does not offer much beyond the $BERA token. Stay tuned for the platform's launch and the subsequent development of the Ponzi scheme.
Blast
Blast is a project that does not provide points, has no venture capital support, no social influencers, no low-quality mobile apps, and no rewards. Just $BLAST.
Operation suggestions: This is a meme coin from CBB, which will be distributed to those who sell the $BLAST airdrop the fastest. Pac-man will also receive 0.5% of the total supply, which is interesting.
Smilee (Tasty NFTs)
Smilee is a platform on Berachain that allows users to earn yields from price volatility and manage the liquidity of their assets. The platform enables volatility trading, opening long and short positions without liquidation risk. The protocol is currently live on Arbitrum and is undergoing active testing. The project plans to launch on Berachain next week, along with a rewards program. The program will include wrapping gBERA (a liquid staking token that automatically accrues yields for holders) - when you stake BERA through Smilee, you will receive gBERA, allowing you to earn additional income from MEV and Smilee incentives while maintaining liquidity.
Operation Suggestion: Review the platform's tutorial and wait for next week's launch. In addition, the project has 3 NFT collections, each of which will receive an airdrop of a token. All links can be found here.
Yeet
Yeet is a casino and DeFi application that combines an income-generating vault, with all functions integrated into one platform.
Operation Suggestion: It may be a bit late to enter the NFTs now, but the project's tokens will be publicly sold on February 7th. The conditions include 100% issuance at TGE, an FDV of $12.5 million, and 8% of the tokens will be publicly sold. Please DYOR.
Beramonium Chronicles
Beramonium Chronicles is a placement RPG game currently available on the testnet. The second season's trial test will be launched soon, and $BERA tokens will be distributed as rewards after the test ends.
Operation Suggestion: The snapshot of NFT holders has been completed, and they will receive the WL (whitelist) for the $BERAMO token sale to be held on Ramen Finance in mid-February. You can consider participating in the public sale phase.
Junky Ursas
Junky Ursas is a complete casino that offers various gambling games, where players can win or lose some $BERA or $HONEY. You know, everything on Berachain is about bears and honey! You can also provide liquidity and earn income through liquidity pools.
Operation Suggestion: Try these games on the testnet so that when the project goes live on the mainnet, you'll already be familiar with the rules and able to win rewards. Pay attention to the liquidity pools and provide liquidity to earn good returns. Additionally, there will be an upcoming NFT minting event on February 7th on Magic Eden. Holders will receive various privileges and airdrops of project tokens.
NFT Collections
Here are the collection series that will be launched in the first few days of the mainnet launch.
Bullas
Bullas is one of the few highly anticipated NFT collections on Berachain that has not yet been launched. The battle between the bull and the bear.
Operation Suggestion: The minting event has already started (GTD stage): link
Steady Teddys
Steady Teddys is the most powerful NFT collection on Berachain, aside from the official series. The avatars from this collection are used by many members of the Berachain ecosystem.
Operation Suggestion: The minting date is unknown, wait for more information.
Ooga Booga Beras
Ooga Booga Beras is the last wave of the seventh rebirth, which will be distributed to holders of the previous six rebirths. There will also be a public minting event. Previously, users who completed the THJ task could receive a discount coupon.
Operation Suggestion: Follow the project and wait for updates.
Other Attention
Wakalah: Built an RWA protocol related to Dubai real estate. Recently, it seems the project has disappeared from the radar.
Beradoge: Nostalgic style, containing NFT collections with butt plugs and potential drops. The project has multiple NFT collection series: Beradoge Gen 1, ANGRY BIDIOTS, and Beradoge Buttplugs. If you don't mind losing money, you can buy these NFTs.
Block Chain: A Layer2 blockchain built on Berachain by HarryPotterObamaSonic10Inu. You can wait for its launch and try making memes there.
Memeswap: Memeswap, nothing much to add. There is an NFT collection here, but please check the floor price.
Bera Horses (Tasty NFTs): A cross-platform GameFi RPG with bear-riding horses. The game has an NFT collection with 4,200 items. DYOR is required.
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