Berachain is a Layer 1 blockchain that is compatible with the Ethereum Virtual Machine (EVM), built on the Cosmos SDK (Software Development Kit), and secured by the innovative Proof-of-Liquidity (PoL) consensus mechanism. The Berachain ecosystem has already achieved a total locked value of over $250 million. Let’s dive deeper into this exciting project with Originstake!

What is Berachain?

Berachain is a high-performance blockchain designed for EVM compatibility and built on the Proof-of-Liquidity consensus. This unique consensus mechanism aims to align network incentives, fostering a robust synergy between Berachain validators and the ecosystem of projects. The technology behind Berachain is based on Polaris, a high-performance blockchain framework that builds EVM-compatible chains on the CometBFT consensus engine.

Learn more: What is Berachain?

What is Berachain’s Proof of Liquidity?

Proof-of-Liquidity (PoL) is a groundbreaking consensus mechanism and governance model developed by Berachain. It addresses key challenges in decentralized networks by ensuring liquidity, preventing stake centralization, and aligning protocols with validators.

High-Level Model Objectives

• Systemically Build Liquidity: Enhances trading efficiency, price stability, network growth, user adoption, and the successful operation of decentralized applications.
• Solve Stake Centralization: Maintains chain integrity, prevents block space manipulation, and avoids monopolies.
• Align Protocols and Validators: Integrates validators into the protocol with better incentives through liquidity provider (LP) pools, bribes, governance tokens, and more to ensure long-term network health.

Why Bera chain?

Berachain addresses several critical issues in the blockchain space, providing users and developers with a robust, efficient, and reliable infrastructure.

Key Issues Addressed:

• High-Performance Demand: Berachain delivers a high-performance EVM-compatible blockchain that meets the needs of the DeFi market and evolving dApps, offering scalability and high throughput.
• PoL Consensus Mechanism: Addresses liquidity issues, concentration problems, and coordination between protocols and validators to ensure network stability.
• EVM Compatibility: Seamlessly integrates with the Ethereum ecosystem, enabling easy migration of dApps and assets and broader interaction capabilities.
• DeFi and Smart Contracts: Promotes liquidity, transaction efficiency, and smart contract development, providing a strong infrastructure for DeFi applications.

Berachain’s Mechanism

Proof of Liquidity (PoL) is the consensus mechanism created by Berachain to prevent Sybil attacks and ensure network decentralization.

Operation of PoL:

• Users stake tokens like wETH, wstETH, and wBTC into the consensus vault to delegate to validators. Unlike other blockchains, Berachain allows the use of tokens from different chains.
• Each staked token has its own weight and earns BERA as a reward.
• This multi-token staking mechanism makes it difficult for individuals to create multiple fake accounts (Sybil attacks) while ensuring network decentralization. However, a Whitepaper confirming the feasibility of PoL is yet to be released.

What is Berachain Protocol?

The Berachain Protocol is an EVM-compatible blockchain built on Polaris EVM, allowing for smart contracts compiled from Solidity or Vyper to bytecode. Its consensus adopts CometBFT, and being built on the Cosmos SDK, it offers modularity for different clients, data layers, and more.

The Berachain tokenomics

BERA Token:

• The network token used for transactions, often called the “gas token.” It pays for transaction gas fees.

How to Get BERA:

• Testnet BERA tokens can be obtained through various Berachain Testnet Faucets for free.

BGT Token:

• The governance token of Berachain, non-transferable, and acquired by depositing liquidity in the native BEX.

How to Get BGT:

• Accumulated by actions in authorized dApps, such as depositing liquidity in BEX, borrowing HONEY on Bend, or providing HONEY in the bHONEY vault for Berps.

HONEY Token:

• A stablecoin in Berachain that aims to approximate 1 USDC.

How to Get HONEY:

• Obtain Testnet BERA via a Berachain Testnet Faucet and swap BERA for HONEY on Berachain BEX.

Token Mechanism

Users stake various tokens into “consensus” vaults to receive BERA tokens. They then stake BERA tokens to obtain BGT tokens – the governance token of Berachain. BGT holders can participate in platform governance, enjoy preferential borrowing rates for HONEY, and receive additional rewards from platform transaction fees.

Staked tokens can be used as collateral to borrow HONEY for spot trading, derivatives, etc., with platforms that build vAMM mechanisms on Berachain. Additionally, staked tokens can be paired with HONEY to provide liquidity, enhancing the ecosystem’s liquidity, protecting the network from Sybil attacks, and optimizing user profits.

Conclusion

Berachain is poised to make a significant impact in the cryptocurrency world with its groundbreaking Layer 1 design. From a community of bear enthusiasts, Berachain has evolved into a thriving Layer 1 ecosystem with innovative mechanics and design. It’s only a matter of time before the market recognizes its potential!

About OriginStake

Originstake is your professional and trusted validator that assists you in your staking activities. We provide full support services, a reward management dashboard, rewards sharing, and much more!

With Originstake, staking is safe, profitable, and extremely cost-effective!