Berachain (BERA)

Berachain (BERA) is an EVM-compatible Layer 1 blockchain built on the Cosmos SDK, featuring a unique Proof-of-Liquidity (PoL) consensus mechanism and a tri-token system to enhance DeFi liquidity, governance, and stability.

What Is Berachain (BERA)?

Berachain is an innovative Layer 1 blockchain platform designed to integrate decentralized finance (DeFi) functionalities with a unique consensus mechanism known as Proof-of-Liquidity (PoL). Built on the Cosmos SDK, Berachain is fully compatible with the Ethereum Virtual Machine (EVM), allowing for seamless deployment of Ethereum-based applications. The platform introduces a tri-token system to facilitate various aspects of its ecosystem.

Core Features of Berachain

Berachain’s Proof-of-Liquidity consensus mechanism | Source: Berachain docs

Proof-of-Liquidity (PoL) Consensus Mechanism: Berachain's PoL consensus allows users to stake a variety of tokens, including major Layer 1 tokens and stablecoins, to specific validators. This process not only secures the network but also provides liquidity to DeFi protocols, aligning the interests of validators and liquidity providers.
Berachain’s Tri-Token System:

$BERA: The native gas token used for transaction fees and staking by validators.
$BGT (Bera Governance Token): A non-transferable token earned by providing liquidity, used for governance decisions.
$HONEY: A native stablecoin fully collateralized by a diverse range of crypto assets, maintaining a 1:1 peg with the US dollar.

EVM Identical: Ensures that developers can easily port Ethereum-based applications to Berachain without significant modifications, fostering a seamless integration experience.
Integrated DeFi Protocols: Berachain offers native decentralized applications (dApps), including:

BEX: A decentralized exchange facilitating token swaps and liquidity provision.
Bend: A non-custodial lending protocol allowing users to deposit stablecoins and earn interest or borrow assets against crypto collateral.
Berps: A decentralized leveraged trading platform offering perpetual futures contracts with leverage up to 100x.

How Does Berachain Blockchain Work?

Berachain operates on the Proof-of-Liquidity (PoL) consensus mechanism, which enables users to stake various tokens to validators. This staking process secures the network and provides liquidity to DeFi protocols.

Validators are incentivized to act in the network's best interest, as their rewards are directly linked to the amount of $BGT delegated to them by liquidity providers. This structure creates a feedback loop where validators who maximize value for their delegators attract more delegations, thereby enhancing network security and liquidity.

Berachain (BERA) Token Utility and Tokenomics

Berachain features a tri-token economy designed to align network security with liquidity provision, governance, and stablecoin utility. The three tokens within the ecosystem serve distinct functions:

How Berachain’s HONEY stablecoin works | Source: Berachain docs

Berachain Token Utility

Berachain (BERA) operates within a unique economic model that integrates its Proof-of-Liquidity (PoL) consensus with a well-structured tokenomics framework. The $BERA token serves as the native gas and staking token, ensuring seamless network operations, while $BGT (Bera Governance Token) is used for governance and economic incentives.

$BERA (Native Gas Token)

Used to pay for transaction fees and smart contract executions.
Required for staking by validators to secure the network.
Functions as the primary medium of exchange across Berachain’s DeFi ecosystem.

$BGT (Bera Governance Token)

Earned by providing liquidity on the network’s DeFi protocols.
Used for governance, allowing holders to vote on network upgrades, emissions, and protocol-level changes.
Non-transferable but can be converted into governance influence, aligning liquidity incentives with network stability.

$HONEY (Stablecoin)

A fully collateralized stablecoin, pegged 1:1 with the US dollar.
Used within the ecosystem for lending, borrowing, and trading.
Supports DeFi applications by providing a stable settlement medium.

Berachain Tokenomics: Allocation and Distribution

BERA token allocation | Source: Berachain docs

At genesis, 500 million $BERA tokens are allocated across five key categories, ensuring a balanced distribution among core contributors, investors, and the community.

1. Initial Core Contributors – 84,000,000 BERA (16.8%)

Allocated to advisors and members of Big Bera Labs, the core development team behind Berachain.
Supports long-term project development, security enhancements, and protocol upgrades.

2. Investors – 171,500,000 BERA (34.3%)

Distributed among early-stage backers, including Seed, Series A, and Series B investors.
Ensures capital allocation for the network’s growth, adoption, and future innovations.

3. Community Allocations – 244,500,000 BERA (48.9%)

Berachain’s community-driven approach is reflected in its largest allocation, which is divided into three key subcategories:

Airdrop – 79,000,000 BERA (15.8%)

Distributed to testnet users, Berachain NFT holders, ecosystem NFT holders, social supporters, ecosystem dApps, and community builders.
Aims to reward early adopters and incentivize broader participation within the Berachain ecosystem.

Future Community Initiatives – 65,500,000 BERA (13.1%)

Reserved for grants, developer incentives, ecosystem applications, and user engagement programs.
Community-led decision-making through Snapshots and RFPs (Request for Proposals) will guide the allocation.

Ecosystem & Research & Development – 100,000,000 BERA (20%)

Supports ecosystem growth, protocol development, node operator incentives, and PoL model enhancements.
At launch, 9.5% of the supply is unlocked to fund developer tools, infrastructure, and liquidity provisioning.

BERA Token Release Schedule

$BERA vesting schedule | Source: Berachain docs

To ensure a sustainable token economy, Berachain enforces a uniform vesting schedule across all categories:

Initial Unlock: One-year cliff after launch, followed by an initial release of 1/6th of allocated tokens.
Linear Vesting: The remaining 5/6ths of the allocated tokens vest gradually over the next 24 months.

This approach prevents market oversupply while ensuring long-term alignment between investors, contributors, and the community.

Berachain’s Staking and Liquidity Mechanics

Users stake assets to validators, earning $BGT while securing the network.
Liquidity providers can deposit assets into Berachain's native DeFi applications, receiving $BGT rewards based on participation levels.
Validators with higher liquidity backing receive a greater share of block rewards, creating a competitive environment for network participation.

Berachain’s economic design ensures that liquidity is directly tied to governance power, reducing the risk of liquidity fragmentation. By integrating Proof-of-Liquidity, Berachain incentivizes long-term participation while preventing governance manipulation by short-term speculators.

All About the Berachain Airdrop

In recognition of its vibrant community and the contributions of early participants, the Berachain Foundation has allocated 15.75% of the total $BERA token supply (approximately 78,750,000 $BERA) for a comprehensive airdrop. This initiative aims to reward various stakeholders, including testnet users, NFT holders, liquidity providers, and community contributors.

$BERA Airdrop Allocation Breakdown

Testnet Users – 8,250,000 $BERA (1.65%)

Eligibility: Participants who engaged with the Artio or bArtio testnets.
Criteria: Interactions with native or ecosystem dApps, unique activities such as minting $HONEY, claiming fees, and delegating $BGT.

Request for Broposal (RFB) – 11,730,000 $BERA (2.35%)

Eligibility: Recipients of the Request for Application (RFA) or Request for Community (RFC) programs.
Criteria: Teams that deployed applications on Berachain testnets or individuals/groups contributing to community growth and education.

Boyco Program Participants – 10,000,000 $BERA (2%)

Eligibility: Users who deposited capital in the Boyco launch program.
Criteria: Rewards based on total value locked (TVL) contributed and selected markets.

Social Airdrop – 1,250,000 $BERA (0.25%)

Eligibility: Individuals who actively engaged in discussions about Berachain on platforms like X (formerly Twitter) or participated in Berachain-related Discord communities.
Criteria: Constructive commentary and meaningful engagement.

Ecosystem NFT Holders – 1,250,000 $BERA (0.25%)

Eligibility: Holders of various NFTs within the Berachain ecosystem.
Criteria: Ownership of specific NFT collections associated with Berachain.

Binance HODLers Airdrop – 10,000,000 $BERA (2%)

Eligibility: Retroactively awarded to holders of BNB within Binance.
Criteria: BNB holdings on Binance platform.

Strategic Partners – 2,000,000 $BERA (0.4%)

Eligibility: Core partners supporting Berachain’s underlying infrastructure.
Criteria: Key contributions to the development and launch of Berachain.

Bong Bears NFTs and Rebases – 34,500,000 $BERA (6.9%)

Eligibility: Holders of Bong Bears NFTs or subsequent rebase collections (e.g., Bond Bears, Boo Bears).
Criteria: Ownership and bridging of NFTs to Berachain.

How to Check Eligibility and Claim $BERA Token Airdrop

Eligibility Verification: Visit the Berachain Airdrop Checker to determine your eligibility and allocation.
Claim Process:

Testnet Users & RFB Recipients: Verify your allocation via the airdrop checker and associate a wallet address with your X (formerly Twitter) account. Allocations will be claimable by February 10, 2025.
Boyco Participants: Rewards will be distributed 30 or 90 days post-launch, depending on the selected market.
Social Airdrop Recipients: Verify your allocation and link a wallet address with your X or Discord account. Claims open by February 10, 2025.
Ecosystem NFT Holders: Allocations are included in the genesis file based on a snapshot taken on January 14, 2025.
Bong Bears NFT Holders: Bridge your NFT to Berachain using the forthcoming Bera NFT bridge to claim your allocation.

By participating in the Berachain airdrop, community members are recognized for their early support and contributions, fostering a collaborative and engaged ecosystem as Berachain transitions into its mainnet phase.

Learn more about how to claim BERA airdrop tokens in our comprehensive guide.

Berachain Key Milestones and Roadmap

Berachain has demonstrated significant progress since its inception, achieving key milestones and outlining a strategic roadmap for future developments.

Key Milestones (as of February 2025)

April 2023: Series A Funding: The project secured $42 million in a Series A funding round in April 2023, followed by a $100 million Series B round in April 2024, valuing the project at $1.5 billion.
June 2024: V2 Testnet Launch: Initiated the V2 testnet, which, within two months, processed over 137 million transactions and saw the deployment of approximately 375,000 smart contracts, indicating robust developer engagement and network activity. The public testnet, bArtio, attracted over 300,000 users and facilitated more than 1 million transactions within 48 hours of its launch.
April 2024: Series B Funding: Announced a $100 million Series B funding round, co-led by Brevan Howard and Framework Ventures, further bolstering the project's financial foundation.

Berachain Roadmap

Q3–Q4 2024: Mainnet Launch and Airdrop: Planned deployment of the Berachain mainnet, accompanied by an airdrop to incentivize early adopters and participants.
2025 and Beyond: Ecosystem Expansion: Focus on enhancing the decentralized finance (DeFi) ecosystem by integrating additional native applications and fostering partnerships to broaden the platform's utility and user base.

Conclusion

Berachain represents a significant advancement in the integration of DeFi and blockchain technology. Its unique Proof-of-Liquidity consensus mechanism and tri-token system align network security with liquidity provision, fostering a robust and decentralized financial ecosystem.

Engaging with decentralized platforms involves inherent risks, including technological challenges and market volatility. Users should conduct thorough research and assess their risk tolerance before participating in the Berachain ecosystem.