The Buzz Around Berachain: A New Era in Blockchain?

August 2, 2025 Team OnChain 12 min read

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Something exciting is brewing in the world of Layer 1 blockchains, and it’s not what you expect. Meet Berachain, a network that seems like Ethereum at first glance but operates with a unique twist. At its core is the Proof of Liquidity (PoL) model a fresh approach to how blockchain systems work. This isn’t just another chain; it’s gaining attention fast, backed by a huge $100 million Series B funding round. Berachain uses a smart dual-token system: $BERA for gas fees and staking, and $BGT for governance and rewards. It’s built to be quick, efficient, and sustainable.

The founders Papa Bear, Smokey The Bera, Dev Bear, and Man Bera may have playful names, but their technology is serious. The mainnet is live, and the recent Bectra upgrade added smart accounts and rollup support. The early 2025 $BERA airdrop created a buzz, especially among NFT fans with collections like Bong Bears and Bit Bears. Big names like Samsung Next, Brevan Howard Digital, and Polychain Capital are backing it, along with crypto leaders like Sandeep Nailwal and Yat Siu. From tokenized treasury bills by Fortunafi to pet ID NFTs by PawPass, Berachain is blending real world and digital assets in new ways. With PoL v2 and the BERA Yield Module, things are heating up. Supported by community members and strong investors, Berachain might just be the next big thing in crypto. Could this chain change everything? Keep an eye on the bears they’re building something massive.

A New Dawn for Blockchain

Picture a blockchain where every transaction sparks fresh ideas, where apps don’t just survive they thrive with energy! The crypto world has long chased faster transactions and cheaper blockspace, but there’s a hidden issue: empty blockspace is worthless without active apps and users. Traditional Proof of Stake (PoS) chains overpay for security, using high inflation for little value. Berachain changes this with Proof of Liquidity (PoL), a smart system that directs rewards to boost app growth, not just validator wallets. By linking validators, developers, and users, Berachain creates a vibrant ecosystem where liquidity and security work together, ready to grow.

Berachain Unveiled: The PoL Revolution

Berachain is not just another Layer 1 blockchain it’s a new way to think about blockchain economics, created by founders Papa Bear, Smokey The Bera, Dev Bear, and Man Bera. Built on the BeaconKit framework with CometBFT for single-slot finality, this EVM-identical chain supports unmodified clients like Geth and Reth, offering Ethereum’s tools with up to 40% faster block times. The heart of Berachain is PoL, which sends block rewards to Reward Vaults, supporting apps like BEX (a native DEX) and HoneySwap (for the $HONEY stablecoin). The dual token model $BERA for gas and staking, $BGT for governance and rewards creates a cycle of growth. Validators stake BERA to join the top 69 active set, earning BGT emissions based on their BGT boost. Users stake PoL eligible assets (like BEX LP tokens) in vaults to earn BGT, which can be delegated or burned for BERA. The February 2025 $BERA airdrop excited NFT holders (Bong Bears to Bit Bears), while PoL v2’s BERA Yield Module (July 2025) brought native yield, making Berachain a hub for DeFi, RWAs, and L2s, with Samsung Next adding fuel to the fire.

Proof of Liquidity: Aligning Incentives

Get ready for something different Proof of Liquidity (PoL) is Berachain’s unique strength, changing how blockchains work! Unlike PoS, where validators collect fixed rewards, PoL ties rewards to ecosystem activity, creating a strong bond between validators, protocols, and users. The top 69 validators, chosen by BERA stake (250,000 to 10,000,000), propose blocks based on their stake, earning a fixed BGT base reward and extra emissions based on their BGT boost the share of total BGT delegated to them. Most rewards go to Reward Vaults, where users stake assets like BEX LP tokens to earn BGT, which can be delegated to validators or burned 1:1 for BERA. Protocols compete for emissions via Incentive Tokens, boosting liquidity. Key parts and roles include:

Security Layer ($BERA): Validators stake BERA to secure the chain, with higher stakes increasing block proposal chances, forming the foundation of network safety.
Reward Layer ($BGT): Non-transferable BGT controls emissions, earned through vault staking or block production, with concave scaling for decentralization.
BeraChef: Manages reward allocations, vault whitelisting, and validator commissions (capped at 20% since July 2025), aligning protocols with governance.
Participants: Validators seek BGT boost and incentives, users stake for BGT and delegate for rewards, and protocols offer Incentive Tokens to attract emissions, creating a lively, aligned ecosystem.

Tri-Token Model: BERA, BGT, and HONEY Dynamics

Berachain’s tri-token model is a smart system that could grow big with Samsung’s backing! $BERA handles gas fees and staking to secure the chain. $BGT, a governance token, drives ecosystem rewards. $HONEY, the native stablecoin, ensures stable transactions. This setup, detailed in the Honey Paper (January 2025), connects validators, users, and protocols to boost growth.

Role of $BERA

$BERA, with a 500M genesis supply and ~10% annual inflation via BGT emissions, secures Berachain, the first Proof-of-Liquidity (PoL) blockchain. It has two main purposes: $BERA pays for transactions, with used tokens burned to reduce supply. Validators stake 250,000 to 10,000,000 $BERA to join the top 69 active set, with higher stakes increasing block proposal chances. The total staked $BERA forms the chain’s economic security, influenced by $BGT dynamics.

Role of $BGT

Unlike typical Proof-of-Stake chains with one token for all roles, Berachain’s PoL splits governance and incentives into $BGT, a non-transferable token earned through ecosystem activity. Users earn $BGT via whitelisted Reward Vaults, often by providing liquidity (e.g., BEX LP tokens) or staking lending market receipt tokens, with options listed at https://hub.berachain.com/pools and claims via BeraHub. $BGT has multiple uses:

Governance: Vote on proposals or delegate voting power (separate from validator boosting).
Boost Validators: Increase validators’ block rewards with $BGT to earn incentives.
dApp Fees: Earn fees from BEX and $HONEY Swap via FeeCollector, auctioned for $WBERA and shared with $BGT boosters.
Redeem for $BERA: Burn $BGT 1:1 for $BERA (one-way), limiting incentives to active participants.

Role of $HONEY

$HONEY is Berachain’s stablecoin, fully collateralized and soft-pegged to the US Dollar for reliable transactions within and beyond the ecosystem. Initial collateral includes $USDC and $BYUSD ($pyUSD), with new assets added via governance. It supports payments, remittances, volatility hedging, and Berachain’s DeFi ecosystem. $HONEY is minted by depositing collateral into vault contracts specific to each asset type, with unique mint and redemption rates. The HoneyFactory contract connects vaults, manages deposits, and mints $HONEY. Basket Mode activates if collateral depegs: for redemption, users get a proportional share of all collateral assets; for minting (if all assets depeg), users provide proportional collateral. Fees from minting/redemption, based on vault rates (e.g., 0.999 for $USDC), go to $BGT holders. For example, depositing 1,000 $USDC at a 0.999 mint rate yields 999 $HONEY, with HoneyFactory transferring 999 $USDC to the vault, receiving 999 shares, and sending 1 share as a fee.

This tri-token model ensures $BERA, $BGT, and $HONEY work together, creating a lively ecosystem where validators compete, users earn, and transactions stay stable.

BeaconKit: EVM Identicality with a Twist

BeaconKit is Berachain’s technical backbone, making it stand out with Samsung’s potential boost! This modular framework, built on CometBFT, offers EVM identicality, supporting unmodified clients like Geth, Reth, and Nethermind for full Ethereum compatibility. With single-slot finality (unlike Ethereum’s 13 minutes) and 40% faster block times via optimistic payload building, BeaconKit is a game-changer. The June 2025 Bectra hardfork (BeaconKit 1.2.0) introduced EIP-7702 (smart accounts for batching, gas sponsorship in $HONEY), EIP-7002 (execution-layer withdrawals), and EIP-7840 (cheaper calldata for rollups), enhancing functionality. EIP-4788 enables permissionless consensus-to-execution proofs, while modularity supports custom L2s for KYC, privacy, or high-throughput apps. Q3 2025 upgrades will enshrine PoL, optimize gas markets (burning ~1M BERA annually), and increase throughput, making Berachain a developer’s paradise.

Incentives Marketplace: Fueling Ecosystem Growth

Berachain’s Incentives Marketplace is where the action happens, and Samsung’s backing could make it huge! Protocols bid for validator BGT emissions using whitelisted Incentive Tokens (e.g., USDC, protocol tokens) via BeraChef. Governance-approved Reward Vaults accept PoL-eligible assets, with protocols setting minimum incentive rates (e.g., 10 USDC per BGT). Validators direct BGT to vaults, earning incentives and a commission (capped at 20%). Users staking in vaults earn BGT, while BGT boosters claim incentives via BGTIncentiveDistributor (24-hour proof updates). A 33% incentive fee is auctioned for WBERA, rewarding BERA stakers in the Staking Vault. From BEX pools to RWA platforms like Fortunafi, this marketplace drives competition, boosting liquidity and innovation.

Reward Vault Governance: Community at the Core

Vault Creation: Creating a Reward Vault is permissionless via the Reward Vault Factory, but whitelisting for BGT emissions needs a governance proposal, ensuring only quality projects join.
Proposal Process: Protocols submit a Request for Reward Vault (RFRV) for BEX pools (requiring live pools, active Incentive Tokens, and TVL) or non-BEX integrations (needing deployed contracts and ecosystem synergy), reviewed weekly by the BGT Foundation and Guardians.
Transparency: Proposals are posted on the Berachain Forum (https://forum.berachain.com), with Token Metadata or Beradata Form ensuring vaults are visible on BeraHub (https://hub.berachain.com), boosting discoverability.
Security Focus: This strict process, streamlined for security and decentralization, ensures PoL rewards only the best projects, keeping the ecosystem strong.

Berachain Governance: BGT’s Power Play

BGT governance, shaped by founders like Smokey The Bera, puts the community in charge! BGT holders control Berachain’s future, from whitelisting Reward Vaults to adjusting BEX fees. Based on OpenZeppelin contracts, the process needs 10,000 BGT to propose, a 1 hour pending state, a 5 day voting period (20% quorum), and a 2-day timelock. A 5 of 9 Guardian multisig cancels harmful proposals, protecting the ecosystem. Recent decisions, like approving USDT as $HONEY collateral (Q3 2025) and EIP-7702, show community strength. Proposals are created on BeraHub, with BGT holders voting or delegating, building a secure and dynamic system.

Tokenomics: The Economic Engine

Berachain’s tokenomics, supported by Samsung Next, are a strong foundation with growth potential! $BERA, with a 500M genesis supply and ~10% annual inflation via BGT emissions, splits across:

Investors: 171.5M (34.3%)
Core Contributors: 84M (16.8%)
Airdrop: 79M (15.8%)
Future Community Initiatives: 65.5M (13.1%)
Ecosystem & R&D: 100M (20%)

Vesting includes a 1-year cliff (1/6th unlocked) and 24-month linear vesting. The February 2025 $BERA airdrop rewarded testnet users and NFT holders (Bong Bears to Bit Bears) via https://checker.berachain.com and https://airdrop.berachain.com. $BGT, non-transferable, is earned via Reward Vaults or block production, with emissions capped for decentralization. $HONEY, a USDC-pegged stablecoin, is minted with USDC, BYUSD, or USDT (Q3 2025) via HoneyFactory, with 0.2% mint/burn fees distributed to BGT holders, driving a lively economy.

BEX and HONEY: DeFi’s New Frontier

BEX and $HONEY are Berachain’s DeFi stars, ready to shine. BEX, the native DEX of Berachain, enables trading and liquidity for pairs like BERA-HONEY (35% default allocation) and USDC-HONEY (0.01% fee, 2000 amplification). Whitelisted pools earn BGT via Reward Vaults, with LP tokens staked for rewards. $HONEY, a multi-collateral stablecoin (USDC, BYUSD, USDT), is minted via HoneyFactory, with Basket Mode ensuring stability during depegs. Fees (0.2%) reward BGT holders, while Bend (launching Q3 2025) and Berps (in scoping) promise deeper liquidity and perpetuals. BEX and $HONEY are transforming DeFi.

PoL v2: BERA’s Yield Revolution

PoL v2, launched July 2025, is a major upgrade for $BERA, The BERA Yield Module, an ERC4626-compliant Staking Vault, lets users stake BERA or WBERA to earn 33% of PoL incentive fees, auto compounded with a 7 day unbonding period. This fixes PoL v1’s issue, where BGT took most rewards, leaving BERA holders out. Now, BERA stakers earn native yield without complex DeFi, reducing circulating supply and increasing demand. The upgrade, needing no hardfork, aligns with the Fat Bera Thesis, driving value to builders and users. Future features like BERA Bonding and Fixed Emissions Streams will boost app incentives, making BERA the core of Berachain’s economy.

Bectra Upgrade: Smart Accounts and Beyond

The Bectra upgrade (June 4, 2025) is a big step forward, and with Samsung Next’s support, it’s set to impress! As the first EVM-identical L1 to adopt Ethereum’s Pectra upgrades, Berachain introduced EIP-7702 (smart accounts for batching, gas sponsorship in $HONEY), EIP-7002 (execution-layer withdrawals), and EIP-7840 (cheaper calldata for rollups). Validators got faster exits, apps gained smoother UX, and rollups saw better scalability. Additional EIPs (2537, 2935, 7623, 7685) improved infrastructure, while BeaconKit 1.2.0 cut reward allocation delays from 8,191 to 500 blocks. This upgrade, live without contract rewrites, makes Berachain a hub for developers and users.

RWAs: Real-World Assets, Unreal Potential

Berachain’s RWA game, is changing the landscape with huge potential! With $800T in tokenizable assets globally, PoL is bringing billions on-chain. Fortunafi tokenizes T-bills, staking receipts in vaults for 6-8% BGT yields, cutting fees. Reservoir’s rUSD stablecoin, with $14M in Kodiak pools, uses PoL to scale collateral. Kettle sold $250K in luxury watch NFTs, while HiveBits mints beehive-backed NFTs, supporting beekeepers. StableHold fractionalizes racehorses, and PawPass tokenizes pet IDs, reducing vet costs. PoL’s Reward Vaults turn any verifiable action into a stakeable receipt, making Berachain a subsidy rail for RWAs, from invoices to solar farms, with cross-contract composability boosting liquidity.

The Fat Bera Thesis: Building the Future

The Fat Bera Thesis, led by Papa Bear and team, is Berachain’s vision. It focuses on enshrined apps like BEX and Bend to drive value to BERA and BGT holders, not rent-seeking L1s. PoL invests emissions into apps, boosting TVL, revenue, and user growth. The C.R.I.M.E program (Community Rewards and Incentives for Meaningful Engagement) will reward on-chain activity, TVL, and fees, while Build A Bera supports top teams with Fast Grants for solo developers. Q3 2025 will bring USDT as $HONEY collateral, Bend launch, and Berps scoping, blending Web2 businesses (payments, RWAs) with high-speed DeFi. Berachain’s quirky posts and global meetups (e.g., Build-A-Berathon, August 2025) are sparking community spirit, promising a future where apps and users lead.