In the fiercely competitive arena of Layer 1 public chains, Berachain has grown from an NFT community into a new force in the DeFi sector, centered on the groundbreaking consensus mechanism of 'Proof of Liquidity (PoL).' By reconstructing the binding relationship between network security and liquidity, it has solved the liquidity locking and centralization issues of traditional PoS mechanisms, providing a new approach for the sustainable development of the blockchain ecosystem.
The core innovation of Berachain lies in the design of the PoL consensus mechanism, which fundamentally changes the path to achieving security for public chains. Unlike traditional PoS, which relies on locked staking assets for security, PoL directly links network security with DeFi liquidity: users can contribute to network security without locking assets, and while providing liquidity for DeFi transactions, they can receive corresponding rewards. This design frees assets from a 'stagnant' state, addressing the liquidity exhaustion issue caused by the locking of over 100 billion assets on chains like Ethereum, and reduces the centralization risk of nodes and staking through decentralized liquidity supply, achieving a dual value of 'security and liquidity.'
The three-token economic system constructs a closed-loop of value circulation in the ecosystem, achieving risk diversification and ecological incentives through functional separation.
• $BERA: As the native gas token, it is not used for staking to ensure adequate circulation, with its inflation and deflation rates clearly calculable, avoiding market distortions caused by concentrated interests.
• BGT: A governance token bound by soul, validators receive BGT rewards by staking BERA to protect the network, with the reward ratio linked to the amount of delegated BGT, incentivizing validators to maximize delegators' returns.
• $HONEY: Ecological stablecoin, serves as the core medium for DeFi transactions, providing value anchoring for various protocols and promoting the efficiency of value circulation within the ecosystem.
The technical architecture and ecological expansion create synergistic advantages. Berachain is developed based on Cosmos SDK and achieves modular EVM compatibility through BeaconKit, ensuring seamless integration with Ethereum tools and smart contracts, significantly reducing developer migration costs. Since the mainnet launched in February 2025, the ecosystem has grown rapidly, reaching a TVL of $3.49 billion by the end of March 2025, ranking sixth in the public chain TVL leaderboard. This explosive growth benefits from its unique community foundation—the project originated from the Bong Bears NFT collection in early 2021, with early NFT holders becoming core builders of the ecosystem, and many directly launching their own dApps, forming a strongly cohesive community-driven model.
Market performance and capital attention confirm its potential. The mainnet launch was synchronized with the token issuance, and $BERA quickly landed on mainstream exchanges such as Binance and Gate.io. The pre-deposit platform Boyco attracted over $3.1 billion in liquidity in just one week, demonstrating strong market recognition of the PoL model. Native dApps within the ecosystem and third-party protocols develop synergistically, covering core DeFi scenarios such as DEX, lending, and yield aggregation, forming a diversified application matrix.
However, Berachain's development still faces challenges. The early ecological TVL was overly concentrated in a few protocols, posing potential centralization risks; issues such as inflation imbalance and sluggish growth have also put the long-term sustainability of the PoL model to the test. In the crypto bear market, a decrease in staking APR could lead to liquidity withdrawal, thereby affecting network security. Additionally, the four core developers are active under anonymous bear-shaped nicknames, which, while maintaining community mystery, has raised some users' concerns about the transparency of project governance.
The essence of Berachain is the reconstruction of production relationships in blockchain, elevating liquidity from an 'ecological accessory' to a 'core productive force' and aligning network security, DeFi vitality, and user interests through the PoL mechanism. Although continuous optimization is still needed in areas such as ecological decentralization and inflation control, this natively liquid public chain design provides a highly valuable practical example for breaking the development bottleneck of Layer 1, also establishing a differentiated advantage in the fierce competition of public chains.@BounceBit
