What Is Berachain?Berachain is developed on top of the Cosmos SDK, featuring compatibility with the Ethereum Virtual Machine and running on proof-of-liquidity.This means the Ethereum-based decentralized apps can easily migrate on the platform. Liquidity providers are responsible for securing a major in the network. Though it sounds like another blockchain, the staking model makes it different.Berachain benefits from the Cosmos SDK’s modular structure. Unlike rigid blockchains, it can swap components without major disruptions. Think of it like a house with interchangeable rooms – you can upgrade the kitchen without tearing everything down.How Does Berachain Work?Berachain runs on proof-of-liquidity (PoL). Instead, it allows validators to stake liquidity provider tokens to secure the network.What Is Proof-of-Liquidity (PoL)?Proof of liquidity is a consensus model where the network gets secured through the staking of LP tokens by validators instead of locking native tokens. This keeps liquidity in the DeFi ecosystem rather than removing it from circulation.Here’s how it works:Users deposit assets like BERA, USDC, or HONEY into liquidity pools and receive LP tokens that represent their share. These LP tokens are then staked in Reward Vaults to earn BGT (Berachain Governance Token). Validators require BGT to direct emissions, which encourages them to attract BGT delegations. To incentivize validators, protocols offer rewards for directing emissions toward their liquidity pools. Users track the highest BGT emissions and move their liquidity accordingly to optimize returns. Additionally, BGT can be burned to mint BERA, creating a self-sustaining system.What’s Being Built on Berachain?Berachain’s mainnet launched on February 6, 2025. Over 80 projects are already in development. Here are some notable ones:DeFi PlatformsBEX (Berachain Exchange): A decentralized exchange (DEX) with liquidity pools, yield farming, and low fees.Apiarist Finance: A platform for yield farming, staking, and lending.Honeypot Finance: A community-run DeFi hub with dual incentives.GamingBoink: A blockchain game with $BERA prizes.Honey Jar: A community-driven NFT gaming project.SocialFiBerally: A platform blending social media with decentralized finance.NFTsBera Monks: A cultural NFT project with hand-drawn characters.BAO BAO: An NFT collection with events, play-to-earn features, and DAO benefits.Berachain’s Three-Token SystemBerachain has a unique token structure. Each token has a specific role:TokenFunction$BERAGas & utility token for transactions, trading, and staking.$BGTGovernance token earned by providing liquidity, used to vote on incentives.$HONEYStablecoin minted by depositing collateral, used as a medium of exchange.Together, these tokens create a balanced system for security, liquidity, and governance.Berachain TokenomicsBerachain started with a fixed supply of 500 million BERA. Here’s how it was allocated:CategoryAllocationBERA SupplyCore Contributors16.8%84MInvestors34.3%171.5MCommunity & Airdrop15.8%79MFuture Community Incentives13.1%65.5MEcosystem & R&D20%100MAfter a one-year cliff, 1/6th of the tokens become liquid. The rest vest over 24 months.How Does Berachain Compare to Other L1 Blockchains?Berachain keeps liquidity active, unlike PoS chains that require locked staking. Here’s a comparison:FeatureEthereumSolanaAvalancheBerachainConsensusPoSPoSPoSPoLStaking ModelLocked tokensLocked tokensLocked tokensLP token stakingEVM CompatibleYesPartialYes (C-Chain)Yes
