jakiro
In the current blockchain world, Berachain may be the most “anti-traditional” project.
Founder Smoky wears a bear hood every time he appears in public;
The project name “Bera” pays homage to the misspelling of the famous “hodl” in the cryptocurrency world;
While other projects were talking about ZK and new programming languages, they chose to build an EVM-compatible Layer1 public chain based on Cosmos technology;
At a time when POW’s transformation to POS has become a trend, they have proposed a brand new POL (Proof of Liquidity) mechanism.
Behind these seemingly nonsensical choices, there is deep thought about the pain points of the current public chain.
01From NFT to Public Chain: A Unique Evolutionary Story
Berachain’s story starts with an NFT project called “Bong Bears”.This seemingly random NFT series adopts a Rebase mechanism similar to OHM: users who hold the first generation of Bong Bears can obtain airdrop rights for subsequent series.
This simple design attracted a large number of users to hold for a long time, and subsequently launched series such as Bond Bears, Boo Bears, Baby Bears, Band Bears and Bit Bears.
Such an NFT project eventually evolved into a public chain project with over 100 million yuan in investment and financing, and was highly watched. What is its uniqueness?
02The dilemma of traditional public chains and innovative solutions for POL
Traditional public chains face a fundamental problem: a large amount of value is locked at the infrastructure level, but builders who truly create value find it difficult to get reasonable returns.Verification nodes and token holders earn great benefits through staking, but their contribution is limited to maintaining network security.
Taking some public chains as an example, their FDV is as high as US$1 billion, but the actual TVL is less than US$100 million, but it has to pay an annualized rate of return of more than 10% to maintain security.This mechanism has led to the emergence of the “ghost chain” phenomenon – the on-chain security is very high, but there are almost no practical applications or activities.
Proof of Liquidity (POL) is a new consensus mechanism proposed by Berachain.Unlike traditional PoS networks that receive rewards through staking tokens, POL requires users to provide liquidity to a specific liquidity pool to receive rewards.In other words, if you want to earn money in this network, you need to actually participate in the ecological construction rather than simply locking in tokens.
To support this mechanism, Berachain designed an exquisite three-token system: BGT, as a non-transferable governance token, can be converted to BERA 1:1; BERA is used to pay Gas fees and market transactions;
HONEY is a stablecoin that is over-collateralized by high-quality assets.These three tokens work together to build a self-sustaining economic model.
Under the POL mechanism, users receive BGT rewards by providing liquidity, which can be entrusted to the verification node to participate in network verification.The verification node not only participates in block generation, but also determines the BGT reward allocation ratio of different liquidity pools through voting.
This creates a unique economic model: Verification nodes need to seriously consider which projects are most valuable, because their votes directly affect the direction of the ecosystem.
This mechanism design achieves three key breakthroughs:
First, it directs network value directly to the builders and participants of the ecosystem.Each protocol can independently design a way for users to obtain BGT and create incentive mechanisms to promote ecological development.This direct value allocation model ensures that the behavior of creating value can be rewarded in a timely and sufficient manner.
Secondly, it establishes a symbiotic relationship between the verification node and the project party.The benefits of verification nodes are closely linked to the success of the project, which inspires them to actively support the development of the ecosystem rather than just focusing on their own pledge benefits.
Finally, it creates a positive incentive cycle.The improvement of user participation brings stronger projects, and powerful projects attract more users and mobility, forming a virtuous cycle.This mechanism effectively prevents the emergence of the “ghost chain” phenomenon, because the value of the network is directly linked to the actual activities and utility of the ecosystem.
In terms of technical routes, Berachain chose to build based on Polaris EVM, which brought two major advantages.First, full EVM compatibility reduces the entry barrier for Ethereum developers; second, as part of the Cosmos ecosystem, Berachain has gained strong cross-chain capabilities through the IBC protocol.This technological choice provides a solid foundation for future ecosystem expansion.
03Community Culture: From Meme to Strong Consensus
Berachain’s community culture construction represents a new community operation idea in the cryptocurrency world.When many new public chains ignore community culture construction, Berachain has successfully built a community ecology with a strong sense of identity and high activity.
This unique community culture is first built on an understanding of the Ponzi culture.The Berachain team, initiated by several veteran DeFi project veterans, did not shy away from the Ponzi tag, but instead faced it with an open and humorous attitude.This attitude has allowed the project to gain more trust and recognition in the community. Although the outside world often compares Berachain to the next Luna, this comparison ignores the essential differences in mechanism design between the two.
The second is the Meme culture that penetrates the bone marrow.From the project name “Bera” to the founder Smokey wearing a bear hood to the unique terms such as “Henlo” and “Ooga Booga” that are popular in the community, they all show a very Internet-like culture that is completely in line with the situation.The current aesthetic of crypto naturally cultivates a strong sense of community identity.
Finally, don’t forget that Berachain originated from an NFT project. Since the original Bong Bears, NFT has not only been a digital asset, but also a carrier of community culture.Each project in the ecology spontaneously associates its NFT series with the Bear theme, forming a unified cultural symbol.This cultural identity is directly reflected in the data: the secondary market listing rate of the major NFT series is less than 2%.Compared with simple tokens, these NFTs carry more cultural attributes and sense of community belonging.
04Ecological projects
Berachain has adopted a bold but practical strategy in ecological construction: the official team will personally develop the core infrastructure.
The founding team recognized that letting multiple DEX, lending and derivative platforms compete with each other can lead to meaningless involuntary and vicious competition.
Therefore, they decided to take these three most important infrastructure into the hands of the official.More importantly, DEX, lending and perpetual contract platforms are usually the most important sources of income in the blockchain ecosystem.
By officially operating these services, Berachain can better give back the profits to BGT holders, providing continuous value support for governance tokens, thereby promoting the healthy development of the entire ecosystem.
At present, Berachain has attracted nearly 100 projects to settle in, among which DeFi projects dominate, fully reflecting Berachain’s emphasis on liquidity.15 native projects have received investments in bera incubators or VCs, and have received a total of US$24.4 million in public financing.
Shogun: Cross-chain transaction infrastructure
Shogun was selected for both the Build-A-Bera program and the Binance S6 incubation project, committed to solving the core pain points of cross-chain transactions.
Currently, cross-chain transactions face multiple challenges: users need to manage multiple wallets, handle Gas fees for different chains, choose suitable cross-chain bridges, and also need to have an in-depth understanding of each ecosystem.These complexities not only increase operational difficulty, but may also lead to inefficiency in transactions or loss of funds.
Shogun solves these problems through innovative intent execution systems.The system introduces a “solvers” mechanism to maximize TEV (traders can extract value) by optimizing trading paths.
Specifically, when a trader sets a trading intention, solvers will find the optimal execution path in a cross-chain environment: for a buy order, strive to complete the purchase at a price lower than the limit; for a sell order, seek high.Selling opportunities at the limit price.This mechanism converts traditional MEV into user benefits while providing a trading experience close to centralized exchanges.
Infrared Finance: Liquid staking innovation
Based on Berachain’s POL mechanism, Infrared Finance has redesigned the liquidity staking model based on the three token architecture.The project provides BGT holders with a value maximization plan through POL vaults and iBGT liquid pledged derivatives.
The project received financing support including Binance Labs.
Kodiak: Efficient liquidity management
Kodiak is positioned as Berachain’s native liquidity center.The project innovatively combines centralized liquidity and automated liquidity management technology, aiming to provide the ecosystem with the best quality liquidity services, thereby supporting the efficient operation of the entire ecosystem.The project received a seed round investment of US$2 million.
Goldilocks: DeFi and NFTfi innovation integration
Goldilocks completed a $1.5 million funding led by Hack VC and Shima Capital, focusing on building DeFi and NFTfi infrastructure.The project contains two core components:
Goldiswap: A trading platform based on custom AMM, adopts a dual-pool design of FSL (supported liquidity pool) and PSL (price-supported liquidity pool).
Goldilend: A lending platform built around the Bong Bears NFT series.Its innovation is that the minimum valuation of NFT is determined by LOCKS token holders through governance votes, breaking away from their dependence on oracles, and bringing a new value discovery mechanism to NFT finance.
Honeypot Finance: Innovate trading and issuance mechanisms
Honeypot Finance completed a $1.3 million multi-round financing to build two core products:
DreamPad: Token launching platform using FTO (Fair Token Offering) mode.The feature is that the project party has zero reservations and provides 100% tokens to the market to ensure maximum fairness.
HenloDEX: A decentralized exchange that adopts the Batch-A2MM mechanism, effectively prevents sandwich attacks through an innovative trading mechanism, and provides price limit trading functions to optimize user trading experience and reduce slippage.
More testnet projects can be queried through BeraLand.
05Participate in interaction
Berachain is running the second version of the test website Bartio. For the most basic interactive participation, you can refer to the Dapps interface of the official website. As mentioned above, they are all the cornerstones of DeFi that Bera has officially made.
Participating in the interaction requires first receiving the test coins from https://bartio.faucet.berachain.com/, and a small threshold filter is done. To obtain the address, you need to have at least 0.001ETH balance on the main network, compared with the previous test website “YiShui”.It’s hard to find” scenario, this round of test network territorial water is already very silky.
After receiving the test network token, you can swap the BEX, exchange the received $BERA into other tokens, and provide flow. Note that some $BERA needs to be retained during redemption as the subsequent gas consumption.
It is recommended to exchange $BERA for stablecoins Dai or STGUSDC, which is used to mint stablecoins $HONEY in HONEY.
After obtaining $HONEY, pledge it in BERP, get bHONEY and then pledge it to the Station to obtain $BGT returns in the corresponding Vault. You can also directly use it as a trading margin and then trade derivatives in BERP.
For more project interactions, Vaults on BGT Station are a good reference. Different Vaults correspond to different interactive projects. You can judge the popularity of the project based on the BGT Capture indicators, interact and obtain the corresponding tokens and deposit them into the Station for profit.
06Summarize
Berachain seems to me to be a very crypto native public chain, which deeply understands two core elements of the crypto world: liquidity and community.
The team deeply understands that the essence of crypto is liquidity.The project faces and embraces the Ponzi attribute of the left foot and the right foot. Through the carefully designed three-token and POL mechanism, this feature will release huge energy in the bull market.At the same time, the team is well versed in the ways of community building.
While maintaining serious public chain research and development, we can also use meme culture to gather users and gather liquidity.A public chain with both user base and sufficient liquidity is worth looking forward to when Berachain’s main network is launched, which may bring a new wave of innovation to DeFi.
