Berachain is undoubtedly the only public chain that has attracted widespread attention before the mainnet launch in 2024. Its strong financing background, collaboration with several flagship projects, and enticing airdrop expectations have reignited the enthusiasm of DeFi enthusiasts. Overall, Berachain is noteworthy in terms of project background, innovation, and data performance. Through analysis of these dimensions, we will reveal Berachain's advantages in technical architecture, community building, and market performance, as well as its development potential in the future Layer 1 track.

1. Project Overview

Berachain is a Layer 1 blockchain project built on the Cosmos SDK, compatible with the Ethereum Virtual Machine (EVM), aimed at solving liquidity dilemmas in the DeFi (decentralized finance) space through its unique Proof of Liquidity (PoL) consensus mechanism. The PoL mechanism ensures the security and vitality of the network by encouraging users to provide liquidity to the network, which differs from the traditional Proof of Stake (PoS) mechanism as it places liquidity at the core of network security and efficiency.

PoL (Proof of Liquidity) mechanism:

  • Liquidity Staking: Berachain requires validators to stake liquidity rather than simply holding tokens. This mechanism promotes the health and sustainable development of the network by rewarding users who provide liquidity to the network.

Three-token System:

  • BERA: As the network's gas token, used to pay transaction fees and support the network's basic operations.

  • HONEY: Berachain's stablecoin, designed to provide stable value storage and a medium of exchange, similar to stablecoins in other ecosystems.

  • BGT (Berachain Governance Token): Used for governance, non-transferable, ensuring decision-making power belongs to long-term holders who truly care about the network's development.

Team Background:

Berachain was founded by a group of DeFi enthusiasts who met in the Olympus DAO community, with extensive backgrounds in the DeFi space. They initially entered the market through the NFT project Bong Bears. Berachain completed $42 million in Series A funding in April 2023, with investors including top crypto investment institutions such as Polychain Capital, OKX Ventures, and Hack VC. In April 2024, it completed $100 million in Series B funding. This not only demonstrates market recognition of Berachain's innovative mechanisms but also provides strong financial support for the project's subsequent development.

2. Data Presentation

The ecosystem of Berachain is developing rapidly; before the mainnet launch, over 270 projects have committed to participating, mainly focusing on consumer applications. Its second testnet (v2 Bartio) will launch in June 2024, and in the B2 testnet phase, the number of addresses has shown exponential growth after September. In less than a month, the number of addresses surged from 6.4 million to 33.3 million, continuing to grow from October to December. Currently, the number of unique addresses has reached 240 million, with daily active addresses peaking in December at a maximum of 7 million.

Data: https://80084.testnet.routescan.io/

Since the opening of pre-deposits, the Berastone vault has received 87,307 ETH from 100,357 unique addresses, with a total value locked (TVL) reaching $273 million.

Data: https://dune.com/rudexxx/berachain-vault-berastone

The total TVL of the pre-deposit pool for Pre Boyco in cooperation with Ethena, Etherfi, Lombard, and Stakestone reached $1.064 billion. Data: https://dune.com/lindyhan/berachain-pre-boyco-deposits

The unique holders of the ecological NFT THJ number 6,998, with over 44,000 minted, raising $6.927 million. The trading volume reached 8,827 ETH. Data: https://dune.com/thj/thehoneyjar

3. Key Milestones

In August 2021, Bong Bears NFT was minted and issued.

2021.11 Berachain was mentioned for the first time

In March 2022, the proposal for Berachain's seed round financing (OIP-87) was approved by Olympus DAO, allowing Berachain to obtain $0.5 million at a valuation of $50 million.

In April 2023, Berachain completed $42 million in Series A funding, with a valuation of $420 million, led by Polychain.

In January 2024, the Berachain testnet will launch.

In February 2024, LayerZero announced new support for Berachain.

In March 2024, Tabi Chain announced it will deploy NFT markets, Launchpad, and event platforms on Berachain.

In April 2024, Berachain completed $100 million in Series B funding, with a valuation of $1.5 billion, led by Framework Ventures.

In June 2024, the second public testnet (v2 Bartio) will launch.

In July 2024, the first joint testnet of the chain abstraction alliance launched by Berachain and the modular chain abstraction L1 Particle Network will go live.

In September 2024, the RFB incentive program will be launched in collaboration with multiple liquidity deposit projects such as Stakestone.

In October 2024, Magic Eden announced new support for Berachain.

TGE expected in Q1 2025

4. Cooperative Projects

In addition to the cooperative projects introduced in the key development milestones above, after the launch of the V2 testnet this year, Berachain will also launch the Request For Broposal (RFB) incentive program in September 2024 to provide liquidity support to early teams. RFB consists of three parts: Boyco, Request for Application, and Request for Community.

Boyco is a liquidity market that provides liquidity support for the Berachain mainnet to ensure there is enough liquidity on-chain for ecological DApps to use. Users can make 'pre-deposits' through the Boyco vault to obtain corresponding tokens and rewards when the mainnet launches.

Boyco has currently collaborated with multiple DeFi protocols for external deposit pools, with a total TVL reaching $1.6 billion: cooperative projects include Bedrock, Cian, Dinero, Ethena + Concrete, Etherfi, Lombard, Solv, Stakestone, Usual, VaultCraft, and ListaDAO. Here are a few major partners:

  • Stakestone

The full-chain liquidity asset protocol StakeStone announced a strategic partnership with Berachain last August, with the STONE token fully deployed on the Berachain bArtio testnet. Users will be able to participate in the Berachain ecosystem and earn rewards using liquidity assets STONE, ssBTC, and STONEBTC from StakeStone. The first phase launched a pre-deposit Vault in collaboration with the RWAFi chain Plume, using STONE and SBTC to participate.

In December, the second Vault product Berachain Vault was launched with StakeStone, aiming to provide a one-stop service for Berachain pre-deposits (Boyco pre-deposit activities) and subsequent exclusive yield services for Berachain PoL (Proof of Liquidity) liquidity mining. At the same time, its vault LP receipts beraSTONE/beraSBTC will unlock more blue-chip DeFi application opportunities, including trading, lending, and leveraged yield. Users participating in Berachain Vault will receive liquidity rewards including up to 1.5% of the total supply in STO governance tokens, BERA token rewards from Berachain's pre-mining, PoL mining yields after the Berachain mainnet launch, and rewards from Berachain's ecological projects including but not limited to Kodiak and Dolomite tokens. StakeStone Berachain Vault is jointly launched with partners such as Pendle, Royco, Morpho, Dolomite, Kodiak, Native, and over 20 Berachain ecological projects/communities, with deposits exceeding $111 million within 24 hours of launch and participation from over 30,000 addresses. Subsequently, beraSTONE has surpassed stETH to become the largest Ethereum yield-generating asset, with the beraSTONE/ETH liquidity pool on Uniswap V3 becoming the largest liquidity pool on Uniswap V3.

  • Lombard

Lombard is a project focused on Bitcoin DeFi, offering cooperative opportunities with Berachain. Lombard's Bitcoin Bera Vault has attracted significant funds in a short time, demonstrating its strong market appeal. Users can earn rewards from multiple protocols, including Berachain, Lombard, and Babylon, by depositing LBTC or wBTC into Lombard's Vault.

  • Ethena

Ethena Labs tweeted in December last year that it has launched Ethena Berachain pre-deposit Vaults, supporting deposits of USDe, sUSDe, USDC, and USDT. Additionally, Concrete launched two Ethena pre-deposit Vaults for Berachain's deposit program, allowing users to retain dollar exposure while earning Berachain rewards and participating in its ecosystem. After the launch of the Berachain mainnet, pre-deposit Vaults will deploy liquidity in whitelisted protocols within the Berachain ecosystem. Deposits of USDe and sUSDe will qualify for Ethena rewards, Concrete points, BERA, and native ecological rewards.

  • Etherfi

The Ethereum re-staking protocol ether.fi announced the launch of Berachain's incentive pre-deposit vault on January 1 this year, supporting deposits of weETH, WETH, stETH, eBTC, wBTC, cbBTC, and LBTC. After the launch of the Berachain mainnet, deposits will remain locked for 90 days.

  • Usual

Usual officially announced on January 5 that the Boyco pre-deposit Usual Bera Vault, jointly launched by Usual and Berachain, has surpassed $15 million in TVL within 24 hours. Users can earn an annual percentage yield (APY) of 37% along with incentives from Berachain, Kodiak, Dolomite, and Veda. Important notes include:

• Vault deposits earn USUAL rewards at the displayed annual percentage yield (APY) and can only be claimed on the Vault page.

• Deposits can be made using USD 0, USD 0++, USDC, or DAI.

• Withdrawals will be made in USD 0++.

• Positions will be locked for 1-3 months after the mainnet launch.

  • Bedrock

The multi-asset liquidity restaking protocol Bedrock launched the uniBTC Berachain Vault on January 6, supporting cross-chain reward mechanisms aimed at bridging Ethereum and the Berachain ecosystem. Users can achieve automated yield, cross-chain asset management, and participate in Berachain's Boyco pre-deposit activities through this Vault. The Vault features a four-tier yield structure, including native Berachain rewards, Bera DeFi returns, CIAN reward tiers, and CIAN points. Users can earn multiple rewards during the pre-deposit phase, including Ethereum mainnet rewards, Berachain rewards, Pendle, EQB, and Corn, among others. Additionally, there is a 30% referral bonus. To participate in this Vault, users must visit the Bedrock dApp, select and deposit supported assets (such as uniBTC, WBTC, cbBTC, or FBTC), and obtain pre-deposit receipts.

5. Ecological Projects

Berachain Exchange (BEX)

BEX is the native decentralized exchange (DEX) of the Berachain ecosystem, providing an efficient trading experience through its unique liquidity pool mechanism. What makes BEX special is its close integration with the PoL mechanism, enhancing the overall liquidity of the network by rewarding liquidity providers. It is also closely integrated with other DeFi protocols of Berachain, such as BEND and BERPS, forming a complete decentralized financial ecosystem.

The design philosophy of BEX is to simplify the trading process, enabling users to easily participate in DeFi activities. It leverages Berachain's unique Proof-of-Liquidity (PoL) consensus mechanism, which effectively separates gas tokens from governance tokens, thereby enhancing user experience.

Overall, BEX, as a core component of Berachain, is dedicated to providing users with a secure, efficient, and easy-to-use decentralized trading platform, promoting the development of the entire DeFi ecosystem.

The Honey Jar (THJ)

The Honey Jar (THJ) is a community project based on Berachain, serving as a coordinator between users, bApps, and the Berachain protocol. THJ is not only the education and community center of Berachain but also responsible for project incubation and matchmaking, dedicated to promoting the development of the ecosystem. Core functions of THJ include creating Honeycomb NFTs, providing liquidity, and implementing reward mechanisms.

In the THJ ecosystem, users can earn BGT rewards by participating in liquidity provision and stake those rewards for additional rewards and incentives. THJ emphasizes deep integration with partners, going beyond simple brand collaborations, and is committed to exploring new possibilities and innovative combinations.

Overall, The Honey Jar is a multifunctional ecosystem aimed at providing users with rich experiences and rewards through innovation and collaboration.

Beradrome

Beradrome focuses on Restaking, further optimizing the network's resource utilization efficiency by allowing users to use their liquidity for more purposes (such as staking and mining). Beradrome initiated NFT activities during the testnet period and promised to conduct a BGT airdrop after the mainnet launch to incentivize early participants.

In addition, Beradrome has also collaborated with other protocols such as Beramonium, which is developing a certain game and has promised $125,000 in incentives to attract liquidity on Beradrome. This indicates that Beradrome is not just a liquidity platform but is actively collaborating with other projects to promote ecosystem development.

Overall, Beradrome is a protocol aimed at enhancing user participation through liquidity incentives and governance mechanisms, with its own unique features in functionality and application.

Sudoswap

As an NFT liquidity market, Sudoswap plans to deploy on Berachain, providing liquidity solutions for NFTs. This is not just a simple NFT trading platform but aims to enhance the diversity and interactivity of the Berachain ecosystem through NFT bridging.

Infrared Finance

Infrared Finance is a protocol focused on Liquid Staking, aimed at providing Berachain users with one-click access to Proof of Liquidity (PoL) solutions. As the first and only dedicated liquid staking tool on Berachain, Infrared Finance optimizes liquid staking rewards, ecosystem participation, and Berachain's three-token model ($BERA, $BGT, $HONEY), while simplifying user experience and improving capital efficiency.

Infrared Finance has launched two products: $iBGT and $iBERA, allowing users to deposit liquidity, earn $iBGT, and stake $iBGT on Berachain's testnet. The goal of the protocol is to maximize value capture and provide users with an easy-to-use liquidity staking solution.

Infrared Finance also secured $2.5 million in seed round funding, including strategic investments from Binance Labs. The protocol collaborates with Solv Protocol to further promote the infrastructure development around Berachain's Proof of Liquidity mechanism.

As the Berachain mainnet approaches, the $iBGT ecosystem is continuously evolving, with new use cases being launched daily. The launch of Infrared Finance is seen as an important milestone in DeFi innovation, encouraging users to participate in liquidity provision and other related activities to earn $iBGT on the testnet.

Overall, Infrared Finance is committed to promoting the development of the Berachain ecosystem through its innovative liquidity staking solutions, providing users with more efficient capital utilization methods.

KodiakFi

KodiakFi primarily focuses on providing BGT mining pool services, aiming to allow users to participate in Berachain's governance and rewards in a more decentralized way through mining pools. By closely collaborating with projects such as Infrared Finance and Beradrome, KodiakFi offers users a richer ecological experience. Furthermore, KodiakFi has launched automated liquidity management (ALM) islands in collaboration with several partners, such as Mozaic and Gamma Strategies, further enhancing liquidity management capabilities.

Ooga Booga

Ooga Booga is a decentralized trading aggregator running on Berachain that provides the cheapest cryptocurrency exchange rates by scanning over six exchanges, thereby improving trading efficiency. According to its website data, the number of unique wallets interacted with has exceeded 460,000, with total trading volume exceeding $2.5 billion.

Future Outlook

With its innovative PoL mechanism and diverse ecological projects, Berachain demonstrates how technological innovation can solve long-standing problems in the blockchain space. With the launch of the mainnet and the addition of more projects, Berachain is expected to not only become an efficient trading platform but also a significant and unique presence in the DeFi ecosystem. Future development will depend on its continued incentives for community participation, further optimization of technology, and interaction with other ecosystems.

Despite the significant potential shown by Berachain, the following risks should be noted:

  • Technical Risks: The stability and security of the new mechanisms PoL and the three-token model need time for verification.

  • Ecosystem Growth Risks: The long-term development of the chain depends on whether the mainnet can continue to attract enough protocols and users.

  • Market Competition Risks: Establishing differentiation and competitive advantages compared to other public chains remains a challenge.