Title: Berachain: A DeFi-focused EVM-compatible L1 Blockchain
Introduction:
Berachain is an EVM-compatible Layer 1 blockchain built on the Cosmos SDK, with a focus on DeFi. It implements a consensus mechanism called Proof of Liquidity (PoL) to address liquidity issues in the blockchain industry. The project originated from the Bong Bears NFT series and was launched in August 2021.
Development History and Funding:
Berachain conducted internal testing in November 2023 and officially announced the launch of its public testnet, “Artio,” on January 11, 2024. The project received a $42 million funding round led by Polychain in April 2023, with participation from institutions such as Hack VC and OKX Ventures.
Team Background:
The Berachain team consists of anonymous members, including co-founders Smokey the Bera, Papa Bear, Homme Bera, and Dev Bear. The team members are early adopters and investors in the crypto space, with deep understanding and research in DeFi and blockchain development.
Mechanism Interpretation:
Berachain is built on the Polaris EVM framework, which is an EVM-based operating system on top of the Cosmos SDK. It provides developers with pre-compiled states and custom module creation, enabling the creation of more efficient and powerful smart contracts.
Advantages of Using Polaris EVM Framework:
1) Ethereum Developer Friendly: Berachain’s compatibility with EVM makes it easier to attract Ethereum developers to build on the platform.
2) Strong Cross-chain Interoperability: As a Cosmos subchain, Berachain benefits from the support of the Inter-Blockchain Communication (IBC) protocol, enabling seamless liquidity flow from other networks.
3) Introduction of Liquidity: The Proof of Liquidity (PoL) mechanism incentivizes the introduction of mainstream assets’ liquidity into Berachain.
Proof of Liquidity (PoL) Mechanism:
The PoL mechanism involves users providing liquidity to the BEX (Berachain’s native DEX) pool to earn BGT (Berachain Governance Token). The BGT is a non-transferable governance token obtained by providing liquidity on the BEX. The mechanism incentivizes liquidity and enhances security.
Advantages of PoL over PoS:
1) Increased Liquidity and Security: Berachain’s PoL mechanism incentivizes liquidity provision, enhancing security while traditional PoS mechanisms may reduce liquidity.
2) Decentralized Inflation: Unlike PoS networks where token issuance is limited to stakers, Berachain’s PoL mechanism distributes newly minted tokens to liquidity providers, promoting a more decentralized inflation model.
3) Coordination between Asset Issuance and Validators: The PoL mechanism encourages collaboration between protocols and validators, allowing validators to control the flow of BGT and protocols to gain governance power through bribes.
Three-Generation Token Model:
Berachain’s three-generation token model consists of BGT (Governance Token), BERA (Gas Token), and HONEY (Stablecoin). BGT can only be obtained by providing liquidity on BEX, while BERA is a gas token obtained through BGT rewards. HONEY serves as the protocol’s stablecoin and is used for income distribution.
Overview of Important Ecological Projects:
– The Honey Jar: Serves as the entrance to the Berachain ecosystem, responsible for education, project incubation, and collaboration within the community.
– Beradrome: A DEX and restaking liquidity market on Berachain.
– Beradoge: A meme project on Berachain with NFT series offering various benefits to holders.
– Sudoswap: A full-chain NFT AMM liquidity market.
– Beramonium: A blockchain game on Berachain where players can earn gems and exchange them for NFTs from other Berachain projects.
– Redacted Cartel: A DeFi yield protocol incubated by the New Order team.
Conclusion:
Berachain’s innovative three-generation token model, based on the PoL mechanism, aims to maximize liquidity while maintaining the interests of active users. The project’s compatibility with Ethereum and strong cross-chain interoperability make it a promising platform for DeFi innovation. However, the future development of Berachain, including project growth, ecosystem expansion, and protocol security, needs to be closely monitored.
