Berachain is emerging as one of the most anticipated Layer 1 blockchains in the crypto space, promising to redefine how liquidity and capital efficiency are achieved in decentralized finance (DeFi). Built on the Cosmos SDK and EVM-compatible through its Polaris EVM framework, Berachain introduces a novel consensus mechanism—Proof of Liquidity (PoL)—and a unique three-token economic model designed to solve long-standing issues in DeFi ecosystems.
With strong backing from leading investors and a growing ecosystem of native and cross-chain projects, Berachain aims to become a liquidity powerhouse in 2025 and beyond.
What Is Berachain?
Berachain is a high-performance, EVM-compatible Layer 1 blockchain launched in late 2021. It leverages the Cosmos SDK for scalability and interoperability while focusing exclusively on advancing DeFi innovation. At its core, Berachain addresses a critical challenge: sustaining long-term liquidity.
Unlike traditional Proof-of-Stake (PoS) chains that incentivize token staking, Berachain rewards users for providing liquidity—making it a first-of-its-kind "liquidity-centric" blockchain.
👉 Discover how next-gen blockchains are redefining DeFi incentives.
The Evolution of Berachain
From Meme NFTs to Mainstream Ambition
Berachain’s origins trace back to the Bong Bears NFT collection launched in August 2021—a meme-driven project that evolved into a full-fledged blockchain initiative. Over time, the team behind the NFT series, including key figures like Smokey the Bera, Papa Bear, and Homme Bera, recognized a fundamental flaw in existing DeFi ecosystems: liquidity decay after initial hype.
Having experienced multiple market cycles, the anonymous core team concluded that true sustainability in DeFi hinges on continuous, incentivized liquidity provision. This insight led to the creation of Berachain—a chain purpose-built for DeFi with built-in mechanisms to reward liquidity providers at every level.
Key Milestones
- November 28, 2023: Internal testnet launch
- January 11, 2024: Public testnet “Artio” goes live
- Q2 2024 (expected): Mainnet launch
Over 30 native protocols are already building on Berachain, with major cross-chain projects like Pendle, Redacted Cartel, Sudoswap, and Abracadabra planning deployments.
Funding and Backers
In April 2023, Berachain raised **$42 million** in a round led by Polychain Capital. Other notable investors include Hack VC and **OKX Ventures**, underscoring strong institutional confidence in its vision. The funding valued the project at $420 million pre-launch.
Despite being an anonymous team, their deep roots in early crypto (circa 2015) and extensive network have enabled rapid development and ecosystem growth.
Core Innovations: How Berachain Works
Polaris EVM – Bridging EVM and Cosmos
Berachain uses Polaris EVM, a custom execution environment that integrates Ethereum Virtual Machine compatibility with the Cosmos SDK. This hybrid architecture enables:
- Seamless deployment for Ethereum developers
- Native support for IBC (Inter-Blockchain Communication), allowing frictionless asset transfers across Cosmos chains
- Modular design with state precompiles for advanced smart contract functionality
By separating block construction, execution, and storage, Polaris enhances performance and developer flexibility—making it easier to build scalable DeFi applications.
Proof of Liquidity (PoL): A Paradigm Shift
Traditional PoS blockchains reward users for locking up native tokens, often reducing circulating supply and liquidity. Berachain flips this model with Proof of Liquidity (PoL)—a consensus mechanism where validation rights are tied to liquidity provision rather than token staking.
Here’s how PoL works:
- Users provide liquidity (e.g., BERA/HONEY or other pairs) on BEX, Berachain’s native DEX.
- In return, they earn BGT, the non-transferable governance token.
- Users delegate their BGT to validators, who produce blocks based on delegated weight.
- Validators and delegators earn rewards in BERA (gas token) and HONEY (stablecoin).
- Validators vote on inflation distribution across liquidity pools.
- Bribery mechanisms allow third parties to influence governance by rewarding BGT holders.
This system ensures that only active liquidity providers gain governance influence, aligning incentives across users, protocols, and validators.
Advantages Over PoS
| Feature | PoS Chains | Berachain (PoL) |
|---|---|---|
| Reward Mechanism | Token staking | Liquidity provision |
| Governance Access | Token ownership | Active participation |
| Inflation Distribution | Centralized (to stakers) | Decentralized (to LPs) |
| Security vs Liquidity | Trade-off | Synergy |
PoL eliminates the trade-off between security and liquidity—two often-competing priorities in blockchain design.
The Three-Token Model: BGT, BERA, HONEY
Berachain’s economy revolves around three distinct tokens:
1. BGT (Bear Governance Token)
- Non-transferable
- Earned solely by providing liquidity on BEX
- Used for voting and delegation
- Cannot be bought or sold—only earned through participation
This design prevents governance centralization by whales and encourages broad community involvement.
2. BERA (Base Economic Resource Asset)
- Native gas token
- Acquired by burning BGT 1:1 or via validator rewards
- Powers transactions and smart contract execution
Separating governance (BGT) from utility (BERA) ensures active network users aren’t penalized for contributing value.
3. HONEY
- Overcollateralized USD-pegged stablecoin
- Serves as a rewards distribution medium
- Backed by protocol-owned liquidity
HONEY draws inspiration from Terra’s UST but improves upon it with robust collateralization and sustainable emission models.
👉 See how new stablecoin models are shaping DeFi's future.
How the System Operates
The user journey on Berachain is straightforward yet powerful:
- Deposit assets (BERA, HONEY, etc.) into BEX liquidity pools → earn BGT
- Delegate BGT to validators → earn BERA + HONEY rewards
- Participate in governance or bribery markets → influence protocol direction
This closed-loop system creates a positive feedback cycle: more liquidity → better yields → more participation → stronger security → higher adoption.
By incentivizing real economic activity instead of passive holding, Berachain fosters a vibrant, self-sustaining DeFi ecosystem.
Key Projects in the Berachain Ecosystem
The Honey Jar
The community hub and launchpad for Berachain’s ecosystem. It features a desktop-style interface with embedded tools and resources. Its Honey Comb NFT grants access to exclusive benefits like airdrops, whitelist spots, APY boosts, and free mints across partner projects.
Beradrome
A DEX and restaking platform featuring ve(3,3) economics—a twist on Curve’s ve-model that combines voting escrow with positive-sum incentives. Holders of its “Tour de Berance” NFT may receive future token airdrops (BERO or hiBERO) upon mainnet launch.
Beradoge (BDOGE)
A popular meme coin project with two NFT collections: Beradoge Gen 1 and Mibidiots. While humorously described as offering “a bunch of useless things,” it’s widely speculated to include token airdrops and cross-project perks.
Sudoswap
The well-known NFT AMM protocol has announced plans to deploy on Berachain. With its focus on NFT liquidity, Sudoswap could bring blue-chip NFTs from Ethereum and other chains to Berachain via bridges and incentive programs.
Beramonium
A play-to-earn RPG game called Gemhunters, where players use NFT characters ("Beramium Genesis Bera") to collect gems redeemable for other ecosystem NFTs like Honey Combs or Beradoges.
Redacted Cartel
Known for its bribing marketplace and LSD (Liquid Staking Derivatives) vaults, Redacted’s integration with Berachain’s native voting and bribery infrastructure could unlock new yield opportunities.
A full list of ecosystem projects is actively maintained by the community, reflecting rapid growth and developer interest.
Frequently Asked Questions (FAQ)
Q: What makes Berachain different from other EVM chains?
A: Berachain uniquely ties consensus security to liquidity provision via Proof of Liquidity (PoL), ensuring that those who contribute to DeFi health gain governance power and rewards.
Q: Can I buy BGT?
A: No. BGT is non-transferable and can only be earned by providing liquidity on BEX. This prevents speculation and centralization of governance.
Q: When will the mainnet launch?
A: Expected in Q2 2024. Once live, all testnet participants and eligible users may receive mainnet allocations.
Q: How does HONEY maintain its peg?
A: As an overcollateralized stablecoin backed by protocol-owned assets, HONEY avoids algorithmic risks seen in past failures like UST.
Q: Is Berachain secure?
A: Built on battle-tested frameworks (Cosmos SDK + EVM), with economic incentives aligned through PoL. However, as with any new chain, early adopters should monitor audit progress and protocol maturity.
Q: Can I participate now?
A: Yes—engage with the Artio testnet, join community initiatives like The Honey Jar, or track upcoming NFT mints linked to future rewards.
Final Thoughts: A Potential DeFi Powerhouse?
Berachain’s innovative blend of Proof of Liquidity, three-token economics, and EVM-Cosmos hybrid architecture positions it as a serious contender in the next wave of DeFi evolution.
Its ability to align incentives among users, developers, validators, and protocols creates a sustainable flywheel effect: more liquidity → better yields → greater adoption → stronger network effects.
While challenges remain—especially around security, decentralization, and long-term retention—the foundation is undeniably strong.
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Core Keywords: Berachain, Proof of Liquidity, DeFi innovation, EVM-compatible blockchain, three-token model, HONEY stablecoin, BGT governance token, Cosmos SDK blockchain