Berachain: A New Public Chain Focused on Decentralized Finance

Introduction

Berachain is an EVM-compatible L1 public chain focused on Decentralized Finance, built on the Cosmos SDK, and utilizes a Proof of Liquidity (PoL) consensus mechanism. The project originated from the Bong Bears NFT series launched in August 2021, which subsequently gave rise to multiple related NFT collections.

The Berachain team believes that liquidity is the foundation of Decentralized Finance, so they designed this public chain to address liquidity issues. Internal testing will start in November 2023, and the public testnet "Artio" will launch in January 2024. It is rumored that Berachain plans to launch the mainnet in the second quarter of 2024.

In April 2023, Berachain raised $42 million in funding, led by Polychain, with a valuation of $420 million. Although the team members remain anonymous, they have extensive experience and a wide network in the crypto space.

Mechanism Interpretation

Polaris EVM

Berachain is built on Polaris EVM, which is an EVM-based operating system on top of the Cosmos SDK. Polaris EVM has the following advantages:

1. Developer-friendly for Ethereum
2. Support powerful cross-chain interoperability through IBC

PoL proof mechanism

The Proof of Liquidity (PoL) mechanism is the core of Berachain's solution to liquidity issues. Users provide liquidity to BEX (the native DEX) to obtain BGT governance tokens, which are then delegated to validators to participate in network consensus.

Advantages of PoL compared to traditional PoS mechanisms:

1. Incentivize liquidity while enhancing security.
2. The distribution of inflation is more decentralized.
3. Coordinate the relationship between asset issuance agreements and validators.

three-token model

Berachain uses three tokens:

1. BGT: Governance token, non-transferable, can only be obtained by providing liquidity.
2. BERA: Gas Token, obtained from burning BGT or verification rewards.
3. HONEY: Native Over-Collateralized USD Stablecoin

This model further stimulates on-chain liquidity by separating governance rights and Gas fees.

Important Ecological Projects

1. the honey jar: Berachain ecological entry, responsible for user education and project incubation

2. Beradrome: DEX and Restaking Liquidity Market

3. Beradoge: A Highly Anticipated Meme Project

4. Sudoswap: Full-chain NFT AMM liquidity market

5. Beramonium: A blockchain game project on Berachain

6. Redacted Cartel: Decentralized Finance Yield Protocol

Summary

Berachain's tri-token economic model and PoL mechanism innovatively address liquidity issues, promising to lead DeFi innovation. As the user base grows and transaction fee revenue increases, Berachain may attract more users and projects, creating a positive flywheel effect.

However, the future development of the project, the growth of the ecosystem, and the security of the protocol still require ongoing attention. Whether Berachain can achieve the expected results remains to be seen.