Intermediate
The Berachain blockchain is a lot talked about in the crypto ecosystem. proof-of-liquidity (Pol) mechanism , it stands out from classic models such as proof-of-stake (POS) aligning the interests of validators, liquidity suppliers and DApp S developers.
In this article, we will see how Berachain , his Tokenomics , as well as the DApp S which is built around it.
Table of contents
What is Berachain and how is it different?
Berachain is a Blockchain Layer 1 entirely compatible with Ethereum Virtual Machine (EVM) , which means that it supports the smart contract S and DApp S developed for Ethereum without modification.
Berachain is built with Cosmos SDK, a tool specially designed to create custom blockchains. This framework allows Berachain to be flexible and scalable, which means that developers can easily adjust its functionalities as needed.
Another advantage of the SDK cosmos is that it facilitates communication between different blockchains, which makes Berachain capable of exchanging data and assets with other networks via the Inter-BlockChain Communication (IBC) protocol.
But what truly distinguishes Berachain is its unique consensus mechanism: the proof-of-liquidity (POL) .
Unlike blockchains using proof-of-stake (POS), where validators must immobilize a huge amount of tokens to have a chance to be selected, Berachain puts liquidity at the heart of the network.
👉 Result?
✔️ A system where validators are not only chosen on the basis of their wealth.
✔️ A blockchain where liquidity suppliers play a key role in governance and awards.
✔️ An alignment of incentives between users, validators and DApp S developers, thus creating a more balanced and participative ecosystem.
More information here
How does Proof-of-Liquidity work (POL)?
The proof-of-liquidity works with two main tokens:
1️⃣ $ bera → the native token of Berachain. It is used for:
- Pay transactions (Gas Fees)
- Staker to become a validator
- Secure the network
2️⃣ $ BGT (Bera Governance Token) → The Governance and Awards Token. It is used for:
- Reward validators and liquidity suppliers
- Govern the blockchain (vote on important decisions)
- Influence the distribution of awards
A key element of the PO is the separation between security and rewards.
Concrete example:
You add liquidity to Beraswap (for example a Pool $ Bera / $ USDC ).
👉 In exchange, you receive receipt tokens (like LP Tokens on Uniswap ).
👉 These Receips Tokens are staked in a Reward Vault → In return, you receive $ BGT.
Then you have two choices:
✔️ Delegate these $ BGT to a validator, who will share his awards with you.
✔️ Burn (burn) your $ bgt against $ bera, at the rate of 1: 1.
So the liquidity providers (LPS) or liquidity suppliers always earn rewards, but they are in the form of $ BGT, and not in USDC or in Bera directly.
Berachain validators: a different approach to the post
In a classic proof-of-stake ( Ethereum , Solana , Avalanche ), plus a stake validator from Tokens, the more it is often selected to offer blocks.
👉 Problem: this model leads to a concentration of power, where validators who have the most funds become more and more dominant.
Berachain avoids this problem thanks to the Pol.
✅ Validators have to stake $ Bera to secure the blockchain.
✅ But receiving more than $ BGT does not give them more chance of being selected as validators.
Why delegate your $ BGT to a validator?
- Berachain validators are not paid in $ Bera, but in $ BGT.
- A validator receives more than $ BGT if he has received a lot of delegation.
- The more a validator attracts $ BGT, the more he earns awards and can redistribute them to those who delegated to him from the $ BGT.
However:
👉 Having a lot of $ BGT does not give more likely to be selected as a validator.
👉 Only the amount of $ Bera Stakée determines this .
How does Berachain's proof-inf-liquidity aligns the interests of his DAppS?
A shortfall of Proof-of-Stake (POS) Blockchains is that validators have no direct interest in supporting decentralized applications (DAppS). Their income comes above all from transaction costs and block rewards, and not from the success of applications that work on the blockchain. Result: they are content to secure the network without really contributing to the development of the ecosystem.
With Berachain and his proof-of-liquidity (POL) , the dynamics change completely. Here, validators are no longer only passive actors who validate blocks. They have an active role in the growth of DApp S, because their profitability depends on the commitment of liquidity suppliers and protocols on the chain.
How do the DAppbenefit from the Pol?
On Berachain, the DApphave several tools to capture value and attract LPS (Liquidity Providers):
Creation of Reward Vaults: DAppS can create rewards that distribute $ BGT in exchange for liquidity. This encourages LPS to provide funds to applications liquidity pools.
Attraction of LPS: As LPS want to maximize their gains in $ BGT, they favor applications that offer the best rewards, thus guaranteeing more abundant and more stable liquidity for these DAppS.
Interaction with validators: DAppS can support certain validators by boosting their allocation in $ BGT, which increases the awards of the latter and encourages them to promote the application.
What do the validators do concretely to support the DAppS?
The validators on Berachain are not content to validate blocks, they direct the $ BGT programs to the DAppS which are profitable for them. For this, they must:
Choose in which Reward Vaults to send $ BGT emissions: the more a validator sends awards to a DApp , the more the latter can attract LPS and strengthen its liquidity.
Maximize their own delegation in $ BGT: as validators are boosted by LPS which delegate $ BGT, they have every interest in choosing DAppS which attract a lot of liquidity and therefore generate more $ BGT to redistribute.
Create a dynamic of aligned incentives: if a DApp works well, it attracts LPS → these LPS gain $ BGT → they delegate their $ BGT to validators who support them → these validators earn more rewards → they continue to support the good DAppS.
A virtuous circle for the whole ecosystem
Unlike POS blockchains where validators are content to secure the network, Berachain validators have every interest in supporting the most efficient DApp.
The DApphave a direct means of attracting liquidity, which allows them to grow more quickly and to strengthen their viability.
The LPS actively influence the network by choosing where to allocate their $ BGT, which pushes validators and DAppto remain competitive.
Result ? An ecosystem where everyone is encouraged to contribute to Berachain's global success.
Tokenomics of Berachain: How many $ Bera in circulation?
Tokens allowance:
- Total supply: $ 500M Bera
- 48,9 % for the community (ardrops, incentive, support for DAppS)
- 34,3 % For investors
- 16,8 % For initial contributors
📅 Airdrop and distribution calendar
The Airdrop de Berachain took place on February 6, 2025, the same day of the launch of the Mainnet. On this occasion, $ 79M Bera were distributed to the Early adopters, testers and Holders of NFT linked to Berachain.
However, the program of new tokens does not stop there. Berachain has planned a progressive unlocking calendar:
-
May 2025 → First release of 2 % of the total supply.
-
February 2026 → A big unlock of 13 % of the supply.
-
From February 2026 to February 2028 → Monthly unlocking of 2.7 % of the remaining supply
Where to buy Bera?
The token $ Bera , a native of the Berachain blockchain, is available on several major exchange platforms. Currently, it can be bought and exchanged on Binance , Coinbase and Crypto.com Exchange for example.
Apart from the centralized platforms, it is also possible to exchange $ Bera on dex (decentralized Exchanges) such as Beraswap , the native Dex of Berachain, where liquidity can be provided and participate in the ecosystem via the proof-of-liquidity (POL).
What DAppare built on Berachain?
Berachain develops a whole ecosystem of DApp S compatible with the proof-of-liquidity (POL) , where liquidity plays a central role.
🔹 1. Kodiak → the dominant Dex on Berachain
- TVL : $ 631.5m
- Role : Principal Decentralized Exchange (Dex) by Berachain. It allows users to exchange tokens and provide liquidity to generate rewards in $ BGT via the Pol mechanism.
- Why is it important? Dex are essential to ensure the liquidity and stability of exchanges on an emerging ecosystem like Berachain.
🔹 2. Beraborrow → Defi protocol to borrow against collaterals
- TVL : $ 389.61m (+106% in 24 hours)
- Role : Loan & borrowing platform that allows users to deposit collateral assets and borrow other tokens.
- Link with POL : The liquidity deposited in the protocol are integrated into the POL economy and can generate $ BGT for users.
🔹 3. Dolomite → Advanced multi-chain loan platform
- TVL : $ 316.36m
- Role : loan and loan that works on 5 different blockchains, including Berachain.
🔹 4. Satlayer → Re staking Bitcoin
- TVL : $ 144.37m
- Role : allows BTC restate on several blockchains (4 in total, including Berachain).
🔹 5. Beraswap → Dex native of Berachain
- TVL : $ 88.51m (+101% in 24 hours)
- Role : Dex integrated into Berachain, facilitating tokens Swaps and liquidity provision .
- Particularity : it rewards LPS with $ BGT , which can then be used to support validators or be converted to $ Bera .
Why are these DAppS important to Berachain?
These applications are the pillars of the Berachain ecosystem because they ensure:
✅ massive liquidity via the Dexs (Kodiak, Beraswap).
✅ Loan and borrowing options to maximize the effectiveness of capital (Beraborrow, Dolomite).
✅ A bridge between the BTC and Berachain, expanding its adoption (Satlayer).
Berachain's ecosystem evolves rapidly, and these DApp show that the Pol is not limited to simple staking , but creates an environment where each blockchain actor benefits from aligned incentives.
Berachain TVL : protocol health
As of February 07, 2025, the day after the launch of his Mainnet, Berachain displayed a total Value Locked (TVL) that is an impressive $ 1.77 billion. This performance allows him to enter the top 10 Blockchains in terms of TVLdirectly, positioning himself in 7ᵉ place as soon as it is launched.
With a price for the Token Bera at $ 8.22 and a market capitalization of 887.38 million dollars Berachain, the Blockchain DAppseem to attract a large amount of funds. Thus, he already stands out as a major player in the compatible EVM blockchains ecosystem.
Is its capitalization underestimated in relation to the quantity of funds blocked in the protocol? Business to follow ...
Conclusion: Berachain, a new consensus and a remarkable entry
With a TVL of $ 1.77 billion as soon as it is launched, Berachain marks his entry into the blockchain ecosystem significantly, directly reaching the 7ᵉ place of blockchains in terms of locked value. This initial success is largely explained by the enthusiasm around its innovative model of "proof-of-liquidity", which aims to align the economic incentives of users and validators around the contribution of liquidity.
If this entry into force shows a real interest in the market, the real consolidation of Berachain will depend on its ability to attract solid projects, to secure its network and to offer a competitive user experience in the face of already well established blockchains.
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Yohan Uzzan
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
