First Look Inside Berachain’s Proof of Liquidity
Berachain’s TVL EXPLODED
Over $2.35B locked in Boyco vaults, a mainnet launch teased "sooner than April," and 234+ protocols building on PoL.
Built by a team with previous DeFi experience holding 9fig treasury value.
Lets break down the first “Up Only” Berachain 👇🐻
Quick Stats & Highlights
Chain: @berachain
Consensus: Proof of Liquidity (PoL)
Testnet: Currently in “bArtio Testnet” (2nd testnet)
Ecosystem Size: 234+ protocols, 2.38M+ total wallets
Mainnet Teaser: Founder “Smokey The Bera” hinted mainnet could launch well before April (“Q5 is coming sooner”).
Liquidity: Over $2.35B deposited in Boyco/Pre-Boyco vaults (as of Jan 31), with 2% of initial $BERA supply allocated as incentives.
Potential: Could rank above Sui (8th by TVL) if a significant portion of deposits remain post-mainnet.
The big draw is Berachain’s triple-token design
$BERA (native gas token)
$BGT (governance/staking token)
HONEY (money market asset)
plus an innovative Proof of Liquidity model that rewards validators, protocols, and LPs for bringing liquidity on-chain.
1. Understanding PoL (Proof of Liquidity)
In PoL:
Liquidity Providers (LPs) bring assets to the chain.
They receive BGT (Berachain Governance Token) emissions as a reward.
Validators stake/delegate BGT to secure the network, also earning rewards.
Protocols compete for BGT emissions to incentivize their pools (e.g., yield-farming incentives).
Because the chain’s security (via validators) and its liquidity (via LPs) are tied together, everyone has a stake in attracting more capital to Berachain.
PoL (Proof of Liquidity) vs. PoS (Proof of Stake): The Key Difference
PoS secures networks by requiring validators to stake native tokens (e.g., ETH, SOL), earning rewards while locking capital. However, it doesn’t directly enhance liquidity in DeFi.
PoL, as pioneered by Berachain, ties security directly to liquidity. Validators don’t just stake; they earn governance power (BGT) by actively providing liquidity. This creates a liquidity flywheel—more liquidity strengthens validators, deepens DeFi pools, and fuels higher rewards.
Where PoS optimizes for network security, PoL optimizes for both security and DeFi growth, making Berachain a self-reinforcing liquidity powerhouse rather than just another staking model. 🚀 #DeFi #PoL #Berachain
2. The Ecosystem
We’ll break it down by sector: DEX, Liquid Staking, Lending, Derivatives, and more.
Each protocol has a unique twist on how they leverage the PoL structure and the chain’s triple-token design.
Table 1. Overview of Berachain DEXs
2.1 DEX (Decentralized Exchanges)
Native DEX for Berachain. Launching with mainnet.
Ensures smooth trading across the network and efficient PoL operation.
Central hub for on-chain swaps and liquidity in the Bear Village.
Catalysts Driving BeraSwap’s Growth
🔹 Strategic Partnership with BeraRoot
MEV protection ensures fair trading by reducing front-running.
Data Availability (DA) tech enhances transaction integrity.
🔹 Utility-Driven NFTs
Discounts on token sales, staking boosts, & exclusive access.
Increases community engagement & platform stickiness.
🔹 Evolution from BEX to BeraSwap
Upgraded UI/UX, liquidity incentives, & PoL integration.
Rebranding signals innovation & continuous development.
Concentrated Liquidity AMM (UniV3-style) for capital efficiency.
Island feature automates rebalancing → reduces user overhead for CLAMM strategies.
Heavy synergy with Beraswap: Island rebalances can tap into BEX liquidity.
Validator Presence: Ranks #2 in BGT delegation in the bArtio testnet, positioning Kodiak as core infrastructure.
A comprehensive DEX platform, covering issuance, liquidity provision, and trading.
Offers MEV-resistant trading through Henlo DEX’s “Batch-A2MM.”
“Dreampad” ensures fair token distribution for new projects.
Leverages BGT earned via validator operations → boosts HPOT token.
Building a safe meme coin environment using anti-bot sniping (via “Pot2Pump”).
2.2 Liquid Staking
Table 2. Liquid Staking Protocols
Accepts LP tokens that yield BGT → issues iBGT to depositors.
Currently the #1 BGT delegation in bArtio testnet.
Integrates with Kodiak’s Island pools for creative yield/rebalancing.
Plans to add $BERA staking, expanding beyond BGT-based derivatives.
Splits BGT rights into LBGT (profit rights) & PAW (governance/voting).
Works with multiple validators → flexible governance participation.
Protocols can acquire PAW to direct BGT emissions (boosting their own pools) without needing large capital.
A vital puzzle piece for early liquidity incentives and ecosystem growth.
2.3 Lending
Table 3. Berachain Lending Protocols
BEND (Native Berachain Lending Protocol)
Users deposit WBTC/WETH to borrow HONEY.
Borrowers also earn BGT (when borrowing HONEY).
Here is twist: HONEY cannot be used as collateral → so it encourages active lending, thus fosters HONEY demand/utility.
Solidifies Berachain’s “triple tokenomics” and incentivizes more liquidity into HONEY markets.
Overcollateralized NECT stablecoin.
Accepts diverse collateral (LP tokens, iBGT, more).
Offers POLLEN tokens for incentives + auto-compounding with @InfraredFinance.
Aims to direct BGT emissions to NECT/iBGT DEX pools → positioning NECT as a core stable asset next to HONEY.
Permissionless lending with up to 100x leverage, no oracles required.
Collaborating closely with Kodiak and Infrared for leveraged yield strategies.
Focused on custom money markets tailored for Berachain’s PoL mechanics (e.g., iBGT, special LP tokens).
2.4 Derivatives
Table 4. Berachain Derivatives
Berps
Native Berachain perpetual DEX.
Simplifies yield participation: single-token HONEY deposit → farm BGT.
Lowers the barrier to entry for derivatives on Berachain; cements HONEY as the base asset for perps.
Options protocol for hedging liquidity-provision (LP) risks.
Gains scale with volatility → offsets impermanent loss.
Real-time rebalancing ensures minimal friction for LPs.
Could become a standard IL-hedging solution as BGT-driven yield farming expands.
Leverage trading protocol based on @IBC_Fi (Inverse Bonding Curves) for liquidation-free positions.
No oracles needed; any asset can become a futures market.
Potential for shorting competitor protocols jockeying for BGT emissions or influence.
2.5 Other Noteworthy Projects
DAO focusing on custom DeFi infra for Berachain.
Maintains LOCKS token with a guaranteed floor price (via Goldiswap).
Offers NFT-collateral lending, interest-trading, and other advanced financial products.
Aggregates users’ liquidity for shared profit.
Features oBERO, BERO, hiBERO tokens for different yield tiers.
Plans to run its own validator node → redirect BGT emissions + distribute among hiBERO holders.
On-chain betting/game protocol using $BERA.
Rewards players with YEET tokens, layering yield strategies via Kodiak & Beradrome.
YeetBond mechanism for purchasing tokens at discounts.
Launchpad for new Berachain projects.
Supports both fixed-price and price-discovery token sales.
Airdrop Recipe tool simplifies token distribution.
Users stake RAMEN to participate in new launches easily.
“Vape 2 Earn” concept: mine tokens using custom e-cig devices.
Health twist: lower nicotine → higher rewards, plus a leasing program for non-smokers.
Future revenue from user data analytics.
2.6 NFT/Community
Largest community in the Berachain ecosystem.
Originated with the Honeycomb NFT, expanded to multiple derivative NFT series.
Partnerships with 89 projects, providing educational content, incubation, and ecosystem synergy.
Evolved into a venture studio:
S&P (Standard & Paws) scoring system for project reliability.
Bera Infinity for ecosystem contributions.
Currently the 3rd-largest BGT delegate, heavily influencing governance.
3. Liquidity & Boyco Vaults: The $2.35B Milestone
Berachain is deploying a well-structured incentive model, involving:
Pre-Boyco Vaults: Early vaults that launched before official “Boyco,” allocated 2% of $BERA supply to participants.
@roycoprotocol Vaults: Officially began on January 28, funneling further rewards for stakers/depositors.
Key Number:
By January 31, total vault deposits surpassed $2.35B, which is huge for a testnet environment.
If Berachain can retain (and re-purpose) that liquidity post-mainnet, it could immediately rank above Sui (currently 8th by TVL among L1 chains).
As the final Boyco deadline (Feb 3) approaches, TVL may climb higher—people tend to deposit last-minute into high-yield opportunities.
4. What Comes After “Q5” Launch?
PoL Flywheel: More liquidity begets higher BGT rewards → stronger validator security → fosters more liquidity.
Emissions Game: Protocols, big whales, or DAOs might buy BGT or PAW tokens (via BeraPaw) to direct incentives to their pools.
Sustainability vs. Hype: Short-term hype is massive, but protocols with real synergy (like Kodiak & Infrared, GummiFi & Kodiak, etc.) might keep capital “sticky.”
Community Strength: Anchored by @0xhoneyjar, this ecosystem invests heavily in user education, transparency, and partnerships—often a sign of longevity.