Berachain: An innovative public chain focused on Decentralized Finance

Berachain was launched at the end of 2021 and is an EVM-compatible L1 public chain focused on Decentralized Finance, built on the Cosmos SDK, using a consensus mechanism of Proof of Liquidity (PoL).

Development History

Berachain can be traced back to the Bong Bears series of NFTs launched in August 2021. After that, this NFT gave rise to new series such as Boo Bears, Baby Bears, Band Bears, and Bit Bears.

The core members of the Berachain team, after experiencing bull and bear markets, deeply felt the importance of liquidity to Decentralized Finance. Therefore, they decided to design an L1 public chain inspired by successful DeFi projects. They created a liquidity proof ( PoL ) verification mechanism, laying the foundation for Berachain's three-token model.

In November 2023, Berachain began internal testing. On January 11, 2024, the public testnet "Artio" will officially launch. It is reported that over 30 native protocols are under development, and protocols from other networks such as Pendle, Redacted, Sudoswap, Abracadabra, etc. also plan to be deployed on Berachain. Berachain is expected to launch its mainnet in Q2 2024.

Financing Status

In April 2023, Berachain secured $42 million in funding led by Polychain, with a valuation of $420 million. Participating institutions include Hack VC, OKX Ventures, and others.

Team Background

Berachain was established by an anonymous team, with co-founders including Smokey the Bera, Papa Bear, Homme Bera, and Dev Bear. The recently appointed Vice President of Engineering is Baloo the Bera(, the former Engineering Director of Mysten Labs). Most team members are early adopters who got involved in and invested in cryptocurrency around 2015, possessing a deep understanding of Decentralized Finance and the development of public chains.

Mechanism Interpretation

Polaris EVM

Berachain is built on Polaris EVM, which is its base operating system for EVM constructed on top of Cosmos SDK. Polaris connects EVM and Cosmos SDK through messaging, separating block construction, processing, and storage from execution.

Advantages of Polaris EVM:

1. Ethereum Developer Friendly
2. Powerful Cross-Chain Interoperability

PoL proof mechanism

The PoL mechanism addresses on-chain liquidity issues by attracting liquidity from mainstream assets.

PoL mechanism process:

1. Users provide liquidity to BEX( Berachain native DEX) to obtain BGT.
2. Users delegate BGT to validators
3. The client and the validator receive BERA and HONEY rewards.
4. Validators can vote on the inflation situation of BGT.
5. Validators distribute rewards to delegators

Advantages of PoL compared to PoS:

1. Incentivize liquidity, enhance security
2. Inflation is more decentralized
3. Coordinate asset issuance agreements and validator relationships

three-token model

The three tokens of Berachain:

• BGT: Governance token, non-transferable, can only be obtained by providing LP on BEX.
• BERA: Gas Token, obtained through a 1:1 one-way burn of BGT or as a validation reward.
• HONEY: Native over-collateralized USD stablecoin, protocol revenue distribution medium

Operation Mode:

• Users provide liquidity to earn BGT rewards
• Delegating BGT to validators can earn BERA and HONEY

Advantages of the three-token model:

1. Separation of governance tokens and Gas tokens
2. The only way to obtain BGT is by providing liquidity.
3. Diversification of staked assets to further stimulate liquidity.

Important Ecological Projects

the honey jar

the honey jar is the entry point of the Berachain ecosystem, responsible for user education, project incubation promotion, and cooperation matchmaking. It has launched the Honey Comb NFT, and holders can receive benefits from multiple projects.

Beradrome

The DEX and Restaking liquidity market on Berachain features ve(3,3) token economics, built-in bribery, voting, and other mechanisms. The "Tour de Berance" NFT series has been launched.

Beradoge

The highly anticipated Meme projects on Berachain include two NFT series: "Beradoge Gen 1" and "Mibidiots."

Sudoswap

The full-chain NFT AMM liquidity market will deploy the protocol after launching on the Berachain mainnet. It is expected to support bridging for blue-chip NFTs.

Beramonium

Berachain's chain game has released "Gemhunters," an idle role-playing game.

Redacted Cartel

Decentralized Finance收益协议,涵盖贿赂市场交易与LSD流动性质押领域,计划在Berachain上部署新项目。

Summary

Berachain's three-token economic model separates gas and governance, maximizing liquidity release and addressing the contradiction between the activity of staking participants in governance and liquidity. It is expected to lead DeFi innovation and create high liquidity and high capital efficiency DeFi protocols.

As the user base grows and transaction fee revenue increases, Berachain will attract more users and projects, creating a positive flywheel. However, the project's future development still requires continued attention.