Berachain is an emerging blockchain platform designed to redefine how decentralized networks balance security, scalability, and user incentives. Built with a focus on liquidity-driven consensus and long-term ecosystem sustainability, Berachain introduces a novel approach to blockchain governance and participation through its unique Proof of Liquidity (PoL) mechanism.
Unlike traditional blockchains that prioritize transaction validation or staking dominance, Berachain aligns the interests of validators, developers, and liquidity providers into a cohesive economic model. This innovative framework aims to foster cooperation over competition, creating a more resilient and inclusive network.
At the core of Berachain’s architecture are three native tokens—BERA, HONEY, and BGT—each serving distinct roles in powering transactions, maintaining stability, and enabling decentralized governance. With over $142 million raised from top-tier investors like Polychain Capital, Samsung Next, and Framework, Berachain has quickly gained momentum in the Layer 1 blockchain space.
In early 2025, the project launched Boyco, a strategic liquidity program aimed at attracting early adopters and supporting nascent protocols by rewarding them for providing crucial liquidity. As of January 2025, this initiative had already attracted over $2 billion in total value locked (TVL), signaling strong community confidence.
How Does Berachain Work? Technical Foundations
Berachain leverages cutting-edge consensus mechanisms and modular design principles to deliver high performance, security, and Ethereum compatibility—all while introducing fresh innovations in network incentive structures.
Ethereum Virtual Machine (EVM) Compatibility
One of Berachain’s key strengths is its full compatibility with the Ethereum Virtual Machine (EVM). This allows developers to build and deploy smart contracts using familiar tools such as Solidity and existing Web3 development frameworks. As a result, dApps from Ethereum can be easily ported to Berachain, reducing onboarding friction and accelerating ecosystem growth.
This EVM alignment ensures seamless integration with wallets, oracles, and DeFi protocols already operating within the broader Ethereum ecosystem.
Proof of Liquidity (PoL): A New Consensus Paradigm
At the heart of Berachain’s innovation lies Proof of Liquidity (PoL)—a consensus mechanism that reimagines how value is created and distributed across a blockchain.
While most networks rely on Proof of Stake (PoS) or similar models where validators are rewarded based solely on staked assets, PoL expands the scope of contribution. It incentivizes not just staking but also active participation in liquidity provision across decentralized exchanges and lending platforms.
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Deepening Liquidity Through Incentives
PoL encourages users to supply liquidity to designated pools by offering them rewards in BGT (Berachain Governance Token). Validators can direct emissions toward specific liquidity pools, effectively voting for which protocols deserve support. This creates a dynamic feedback loop where popular and useful dApps naturally attract more capital.
By aligning validator incentives with ecosystem health, Berachain avoids the common pitfall of short-term farming followed by rapid liquidity withdrawal.
Reducing Centralization Risks
Traditional PoS systems often lead to centralization, where a small number of large stakeholders dominate validation rights. Berachain counters this by distributing BGT tokens not only to stakers but also to liquidity providers. This broader distribution helps decentralize governance power and promotes fairer participation.
Moreover, since BGT cannot be transferred (only burned for BERA), it discourages speculative trading and encourages long-term commitment to network development.
Mutual Alignment Between Protocols and Validators
Under PoL, protocols can offer bribes—additional incentives—to validators who direct rewards toward their liquidity pools. In return, validators gain influence over which projects thrive. This bidirectional relationship strengthens collaboration between infrastructure providers and application builders, fostering a symbiotic ecosystem.
CometBFT: High-Performance Consensus Engine
Berachain runs on CometBFT, a Byzantine Fault Tolerant (BFT)-based consensus engine known for speed, reliability, and security. CometBFT enables fast finality—transactions are confirmed in a single slot—and maintains network integrity even if some nodes behave maliciously.
This robust foundation supports high throughput and low latency, making Berachain suitable for real-time financial applications and complex DeFi interactions.
BeaconKit: Modular Consensus for EVM Chains
To bridge Ethereum’s execution environment with modern consensus layers, Berachain uses BeaconKit, a modular framework that integrates CometBFT with any EVM-compatible execution client via the Engine API.
Key benefits of BeaconKit include:
- Single-slot finality, far faster than Ethereum’s ~13-minute finality window
- Optimistic block construction, reducing block creation time by up to 40%
- Full compatibility with Ethereum Improvement Proposals (EIPs)
- Support for Layer 2 rollups, custom block builders, and data availability layers
This modularity allows Berachain to function as both a Layer 1 and a base layer for scalable Layer 2 solutions.
Core Components of the Berachain Ecosystem
The Berachain ecosystem is built around three foundational pillars: the core protocol, the decentralized exchange (BEX), and integrated blockchain oracles.
The Berachain Protocol
The protocol orchestrates all network operations—from block validation to token emissions—through a combination of BeaconKit, CometBFT, and PoL. Validators play a central role: they propose blocks, validate transactions, and distribute rewards via the Berachef smart contract.
When validators earn rewards, Berachef automatically redirects a portion to pre-approved liquidity pools. This ensures that network security directly contributes to DeFi liquidity health.
Validators can also accept bribes from protocols seeking greater visibility and support, creating a transparent marketplace for influence.
Berachain Exchange (BEX)
BEX is Berachain’s native decentralized exchange, designed to maximize efficiency and user rewards. Key features include:
- Native integration with PoL for optimized liquidity routing
- Rewards for LPs in the form of BGT tokens
- Low slippage and fast swaps powered by CometBFT
By embedding consensus-level incentives into the DEX, BEX ensures sustainable liquidity without relying on short-lived yield farming campaigns.
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Berachain Oracle System
Accurate price data is critical for DeFi applications. Berachain includes a first-party oracle powered by Skip’s solution and enhanced with ABCI++ Vote Extensions.
Validators submit price feeds for major cryptocurrency pairs with each block they validate. They can choose between trusted external sources or internal market data, ensuring flexibility and resistance to manipulation.
This decentralized pricing mechanism provides reliable inputs for lending platforms, derivatives markets, and stablecoin systems like HONEY.
Understanding the BERA, HONEY, and BGT Tokens
Berachain’s triple-token model separates utility, stability, and governance functions across three distinct assets.
BERA – The Native Utility Token
BERA is the primary cryptocurrency used for paying gas fees and participating in network activities. It was launched in February 2025 via an airdrop to early contributors and community members.
Total supply: 500 million BERA, allocated as follows:
- 34.3% to investors
- 20% to ecosystem and R&D
- 16.8% to advisors and Big Bera Labs
- 15.8% to community airdrops
- 13.1% for future community initiatives
BERA is transferable and tradable, forming the backbone of economic activity on the chain.
HONEY – The Native Stablecoin
HONEY is a USD-pegged stablecoin (1:1 ratio) designed for seamless value transfer within the ecosystem. Users can mint HONEY by depositing collateral through platforms like Bend, promoting capital efficiency and reducing reliance on external stablecoins.
As more dApps adopt HONEY for payments, lending, and trading, it strengthens internal economic cohesion.
BGT – The Non-Transferable Governance Token
BGT (Berachain Governance Token) gives holders voting rights on protocol upgrades, fee structures, and incentive allocations. Unlike typical governance tokens, BGT is non-transferable—it cannot be sold or traded.
Instead, users earn BGT by:
- Providing liquidity on BEX
- Borrowing HONEY on Bend
- Staking HONEY in the bHONEY vault
BGT can be burned at a 1:1 rate for BERA, creating a redemption pathway that ties governance participation to long-term value capture.
The Team Behind Berachain
Berachain’s founding team operates under pseudonyms: Smokey the Bera, Dev Bera, and Homme Bera. Based in Toronto, the team chose anonymity to protect privacy, enhance security, and maintain regulatory flexibility.
Prior to Berachain, the trio successfully launched the Bong Bears NFT collection, which generated over $20 million in trading volume and granted holders access to multiple derivative NFT drops (Boo Bears, Baby Bears, etc.).
Their background spans venture capital, healthcare technology, and blockchain engineering—bringing diverse expertise to the project’s development.
Frequently Asked Questions (FAQ)
Q: What makes Berachain different from other Layer 1 blockchains?
A: Berachain stands out with its Proof of Liquidity consensus model, which rewards both staking and liquidity provision. This creates stronger alignment between network security and DeFi ecosystem health.
Q: Can I trade BGT like other governance tokens?
A: No. BGT is non-transferable to prevent governance centralization. However, it can be burned 1:1 for BERA, giving it tangible economic value.
Q: Is Berachain EVM-compatible?
A: Yes. Developers can use Solidity and standard Web3 tools to build dApps on Berachain without modification.
Q: How does the Boyco program work?
A: Boyco incentivizes early liquidity provision to new protocols launching on Berachain. Participants earn BGT rewards for supporting emerging projects during their critical early stages.
Q: Who invested in Berachain?
A: Major backers include Polychain Capital, Samsung Next, Framework Ventures, Brevan Howard Digital, Hashkey Capital, Zaki Manian (Tendermint co-founder), and Mustafa Al-Bassam (Celestia co-founder).
Q: Where can I buy BERA tokens?
A: BERA is available on major exchanges compliant with financial regulations. For secure trading experiences, consider platforms integrated with advanced custody solutions.
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Berachain represents a bold evolution in blockchain design—one that prioritizes sustainable incentives, deep liquidity, and modular innovation. As the ecosystem matures beyond its 2025 mainnet launch, its ability to attract developers, secure capital, and maintain decentralization will determine its long-term success among leading Layer 1 contenders.