Berachain has been causing a stir in the crypto space – and for good reason. Whether it’s their unique solution to liquidity problems, their passionate and actively engaged community, or another factor entirely, the project has piqued the interest of many. Join us as we unpack the fascinating story behind Berachain’s journey, including its pre-launch success and subsequent price recovery.

Boyco's Pre-Launch Success

That’s where pre-launch liquidity platform Boyco came in to help coalesce all of Berachain’s initial successes. Boyco was developed in partnership with Enso, Berachain, and LayerZero. Through this partnership, the two hope to address the “cold start” problem that most new decentralized applications (dApps) face. This partnership allowed dApps to build pre-launch liquidity markets. This way, users don’t have to wait for the mainnet to go live before they can deposit assets.

Berachain’s Proof-of-Liquidity (PoL) consensus mechanism incentivizes users to supply liquidity through rewards. Users excitedly deposited assets into vaults on Boyco. This participation allowed them to collectively accrue more than 2.0% of all BERA tokens. The idea is simple: the more liquidity provided, the more rewards users receive.

This strategy resulted in an eye-popping $2.5 billion being committed before the program even got off the ground. Our projects have helped build a dynamic and engaged community on X. This vibrant community has created a huge concentration of assets in permanent flaw. This high level of user engagement and participation is a strong testament to the value and allure of what the project has to offer.

Price Dip and Recovery

After Berachain launched its mainnet, the BERA price skyrocketed to $15 on launch day. However, this high was short-lived. Profit-taking from whales and early buyers created a massive pullback, bringing the price back down to $7.50. Such volatility isn’t unusual in the crypto market, particularly following a much-anticipated launch.

Even with that first trough, BERA showed strong resilience. The price was able to bounce back, demonstrating both the fundamental strength of the project and the resilience and passion of the community. There were many reasons for this rebound — successful liquidity management strategies, the unique Proof-of-Liquidity framework — that make this situation different.

Nothing would ensure Berachain’s success more than its ability to serotonin boost successful community engagement and further trading volume. The purpose-built project rewards liquidity providers, establishing a positive feedback loop. This makes it more attractive to additional users, increasing the network effects and real long-term value of the entire ecosystem.

Proof-of-Liquidity (PoL) Explained

Beyond being built on Cosmos, Berachain’s Proof-of-Liquidity (PoL) consensus mechanism is arguably the project’s biggest differentiator. It gives developers, users and investors a winning head start for their DeFi power house, synchronizing everyone on the network with an incentive flywheel. That’s because the more people join the ecosystem, the more beneficial the ecosystem grows to be for all participants.

Tri-Token Model

This separation of tokens provides a more fungible, stable, and efficient ecosystem.

  • BGT (Bera Governance Token): The native staking and governance asset.
  • BERA: The native gas asset used for transaction fees.
  • HONEY: The native stablecoin.

Users have the option to lock assets into application reward vaults, which allows them to earn a portion of BGT emissions from validators. This establishes a certain level of distance between the entities that bear BGT emissions and the entities that guide them. In addition to earning BGT, the validators must point the majority of it earned to the applications reward vault instead of keeping it all for themselves. This fosters liquidity provision and incentivizes validators to actively participate in the health of the ecosystem.

Reward Vaults

Different reward types overlap to create an incentive flywheel that keeps the entire Berachain ecosystem aligned and growing. This really attracts extreme liquidity to our homegrown applications. PoL will let users stake assets on Berachain while still using those same assets in other DeFi protocols. This ensures liquidity provision is incentivized and aligns the interests of all participants on the network.

Incentive Flywheels

The PoL framework enables you to leverage native assets like BERA, BGT and HONEY. Join the ecosystem and begin earning amazing rewards from day one! Validators are rewarded with BGT. Instead of directly to them, a large portion of their revenue is placed into an application’s reward vault, incentivizing their active engagement with the ecosystem. For each user that locks their collaterals on rewards vaults, users can earn BGT emissions validated by validators. They can further sub-delegate these emissions to validators to accrue even more rewards.

Berachain's Ecosystem

Users who stake for validators receive a portion of Berachain core dApp fees (through BeraSwap and HoneySwap). This unique model creates a powerful economic incentive for users to engage and invest in the governance and continued evolution of the ecosystem itself.

Berachain’s Total Value Locked (TVL) has exploded to $3.5 billion, sitting on a 116% increase in the last month. That’s a sign of excellent execution and increasing confidence in the project.

Beyond Merkle trees, Berachain relies on Proof of Liquidity (PoL) as its consensus mechanism. Unlike Ethereum which recently moved to Proof of Stake (PoS), Solana is a native Layer 1 purpose-built to advance DeFi. Each of these approaches has benefits and drawbacks.

Berachain vs. Other Layer 1 Solutions

With its novel liquidity-first approach and overwhelming community support, Berachain looks set to be one of the most exciting Layer 1 solutions. At the same time it demonstrates tremendous resilience to price volatility. Its continuous development in Total Value Locked (TVL) underscores its promise of long-term prosperity. Berachain has been quickly growing and maturing its ecosystem. We look forward to seeing how it stacks up against the pack of other leading Layer 1 solutions.

  • Berachain (PoL): Incentivizes liquidity provision and active participation in the ecosystem.
  • Ethereum (PoS): More energy-efficient than Proof of Work, but can lead to centralization.
  • Solana: High throughput and low transaction fees, but can suffer from network congestion.

Berachain's innovative approach to liquidity and its strong community support position it as a promising Layer 1 solution. Its resilience in the face of price volatility and its continued growth in TVL demonstrate its potential for long-term success. As Berachain continues to develop and expand its ecosystem, it will be interesting to see how it stacks up against other leading Layer 1 solutions.