Discussion of Berachain Ecosystem Features and Overview of Core Projects Before Coin Issuance

Introduction

Berachain is a Layer 1 network featuring a PoL (Proof of Liquidity) consensus mechanism that aligns the interests of validators, liquidity providers, and the protocol. Currently, Berachain is conducting its second test network "bArtio Testnet" to address the issues discovered in the first test network.

Many ecological protocols have been deployed on the bArtio Testnet version. As of January 2nd, according to the Berachain official website, a total of 234 protocols are participating in the bArtio Testnet, and the cumulative number of wallets participating in testing Berachain's PoL mechanism has exceeded 2.38 million. Although this is only in the test network phase, these figures indicate that the market's attention towards Berachain and its ecosystem is quite high.

Starting from the end of 2024, Smokey The Bera, the founder of Berachain, announced the "Q5 launch of the mainnet" through a recent tweet introducing Boyco, hinting that "Q5 will happen before April", indicating that the launch of the mainnet is imminent. This has also attracted both new and old users of Berachain to join the ecosystem.

However, to participate in the Berachain ecosystem, one must understand their PoL mechanism. Before the mainnet launch, the various complex financial products launched by the protocols to gain an advantage in the PoL mechanism have instead created a significant barrier to entry for new users.

This article aims to explore various areas of the Berachain ecosystem to effectively lower the participation threshold for users. We will discuss projects that have performed outstandingly in different fields and detail how each protocol leverages the PoL mechanism.

DEX

Berachain has a native DEX called BEX, which will be launched on the mainnet as BeraSwap. BeraSwap will support smooth liquidity trading within the ecosystem and ensure the effective operation of the PoL mechanism. Given the existence of BEX, other DEXs preparing to launch on Berachain are also preparing various more convenient and efficient services and strategies to effectively compete with BEX, in order to attract users and liquidity.

Kodiak

Kodiak is a DEX that stands out from Berachain's incubation project "Build a Bera". In addition to supporting the Uniswap v2-style features of BEX, which average liquidity distribution across the entire price range (, Kodiak also offers CLAMM ) concentrated liquidity automated market maker ( functionalities similar to Uniswap v3, allowing liquidity providers to set and concentrate liquidity within a specific range.

Users can provide liquidity in a narrow range through the CLAMM pool to more effectively farm $BGT. In addition, Kodiak also offers an Island feature that helps users automatically reset and balance the CLAMM range, reducing the hassle of managing liquidity supply positions. This feature uses BEX to rebalance liquidity, thereby establishing a complementary rather than competitive relationship.

Moreover, due to the customizability of the liquidity range, the tokens of CLAMM liquidity positions are often difficult to be used by other protocols. However, Kodiak standardizes users' CLAMM liquidity positions through the Island feature, allowing the LP tokens to be utilized in other protocols as well, promoting more flexible and diverse ecological gameplay.

Before the mainnet launch, Kodiak has collaborated with many projects in the Berachain ecosystem, establishing its position as a core infrastructure. They also operate their own Berachain nodes as validation nodes, and as of January 3, they have received the second highest BGT authorization in the bArtio Testnet.

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) Honeypot Finance

Honeypot Finance is a protocol that supports all aspects of the token lifecycle, from issuing to providing liquidity and facilitating effective trading, consisting of the following sub-protocols:

• Henlo DEX: A DEX specifically designed to protect users from MEV attacks, offering limit orders and Batch-A2MM functionality, which can aggregate user orders within a specific period and execute them at the same price.

• Dreampad: A Launchpad protocol that provides incubation and funding opportunities for projects preparing to launch on Berachain, while ensuring fair token issuance and distribution.

• Pot2Pump: A meme coin issuance platform that provides a safer environment for meme coin issuance and trading, featuring functions such as preventing bot sniping and refunding participating users if the 24-hour fundraising target is not met.

Like Kodiak, Honeypot Finance also plans to operate as a validator after the mainnet launch, providing its governance coin $HPOT as a delegation reward to users who delegate $BGT.

In addition, Honeypot Finance releases accumulated $BGT to the $HPOT liquidity pool, thereby enhancing the liquidity of $HPOT. The protocol also plans to increase the token value by using node operation income to purchase and burn $HPOT, while retaining the reward value paid to $BGT delegators, further solidifying the liquidity of $HPOT.

In addition to the aforementioned Kodiak and Honeypot Finance, there are other protocols advocating for efficient and convenient trading features preparing for the Berachain mainnet, including BurrBear, which supports capital-efficient trading by pooling three or more similarly priced underlying assets (similar to Curve Finance), the liquidity aggregator OogaBooga, and the cross-chain abstract trading protocol Shogun.

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Liquidity Staking

In a typical PoS network, network rewards are distributed to validators who hold a certain amount of tokens and operate nodes. Therefore, if the network itself does not have an authorization structure for a native coin, general users who do not operate nodes cannot receive network rewards.

To address this issue, liquidity staking protocols distribute rewards by accepting the staking of native tokens and delegating node operations, allowing regular users to participate in network staking. These protocols also issue LP tokens to stakers as proof of how many native tokens they hold, thereby increasing the liquidity of the ecosystem. Through these functions, liquidity staking protocols have also become a core infrastructure of PoS networks.

In contrast, although Berachain requires 69,420 $BERA for node operation, its structure allows liquidity providers to earn network rewards calculated in $BGT and liquidity provision interest when they deposit liquidity tokens received from the ecological protocol into Berachain. Therefore, aside from the differing methods and sequences, Berachain has essentially built liquidity staking into the network protocol.

Although Berachain requires 250,000 $BERA for node operation on the main network, the structure of Berachain is designed to distribute $BGT rewards and interest to liquidity providers. Therefore, aside from the differences in method and order, Berachain essentially integrates liquidity staking into the network protocol.

However, in Berachain, existing protocols can only provide rewards and gain voting rights by collaborating with validators, or by establishing a self-sustaining flywheel model to kickstart their liquidity pools, as demonstrated by Kodiak and Honeypot Finance through their respective operations of their own nodes.

In this context, Berachain's liquid staking protocol will provide the $BGT ) voting rights for deciding emissions and the redemption function of (. This allows Berachain ecosystem projects to incorporate the liquidated $BGT into their protocol mechanism without the need to negotiate with validators or nodes. In other words, this makes it easier for ecosystem protocols to adopt a structure that closely integrates the PoL mechanism.

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) Infrared

Infrared is a liquidity staking protocol co-incubated with Kodiak through Berachain's "Build a Bera" program.

The Infrared operated vaults can accept LP tokens from liquidity pools, generating $BGT interest while running network nodes. When users deposit LP tokens into these vaults, Infrared will use these tokens to generate $BGT, and users can claim $iBGT (liquidated $BGT) proportional to their deposited LP tokens.

Users can utilize the received $iBGT in the following ways:

• Stake in Infrared to receive rewards generated by the nodes.

• Use in other DeFi protocols

• Sell for profit

Therefore, Infrared concentrates the rewards generated by the PoL mechanism and distributes them to fewer $iBGT stakers by turning $BGT into a liquid token, while also helping other protocols in the Berachain ecosystem to incorporate $iBGT into their protocols, allowing their platforms to provide higher returns for their users. In addition, Infrared also plans to launch new features that enable them to receive and settle the $BERA required for node operation while running nodes and distributing profits.

The best example of effectively utilizing the Infrared function is Kodiak's Island Pool, which we have also briefly introduced in the aforementioned DEX field. After the mainnet launch, the Infrared plan will launch Kodiak's Island Pool ###, which has been operating on the testnet (, allowing users to use Kodiak's CLAMM for more efficient $iBGT farming, and the received $iBGT can be restaked in Infrared or re-deposited into Kodiak's $iBGT/$BERA Island Pool for more $iBGT farming. Of course, users can also choose other gameplay options within the ecosystem.

Due to the interconnectivity of this protocol and effective ecological gameplay, Infrared has garnered the attention of many users, currently accepting the most $BGT delegation in the bArtio Testnet. Furthermore, many ecological projects have also partnered with Infrared and plan to launch various derivative products, indicating that Infrared will become the most important infrastructure after the mainnet launch.

Meanwhile, the specific details on how Infrared will use the delegated $BGT to select the Emission of $BGT have not been made public. Therefore, it will be quite important to closely monitor whether Infrared will implement these processes in a decentralized manner and to whom the voting rights of the $BGT it holds will be provided.

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) BeraPaw

BeraPaw is also a liquidity staking protocol, but they do not operate their own nodes. Instead, they run a treasury between different nodes and liquidity pools registered in BeraPaw, issuing $LBGT as the liquidation token for $BGT.

The governance token of BeraPaw is $PAW. Users can vote on which liquidity pools should receive $BGT using the $BGT held by BeraPaw. Node operators distribute the reward income generated from staking $BGT to holders of $LBGT through this method.

BeraPaw adopts a structure that divides the use of the $BGT token into two types of tokens: $LBGT and $PAW, with 1### receiving rewards and 2) voting for the $BGT emission pool. Through this structure, users and protocols using $PAW tokens for $BGT Emission voting can exercise more voting power with relatively less capital. Therefore, protocols seeking initial liquidity in the Berachain ecosystem are expected to actively utilize $PAW to generate $BGT rewards for their liquidity pools.

The above are two liquidity staking protocols that are about to officially launch on Berachain. Although these protocols not only provide more derivative products but also offer users more ways to play, they also make the ecosystem more complex. In Berachain