Blockchains keep changing, and Berachain is a new one trying something different. It looks like Ethereum, works like Ethereum, but has its own way of keeping the network secure. Instead of just staking tokens like other blockchains, Berachain uses Proof of Liquidity to make sure the network stays active and strong.
In this guide, we will learn what Berachain is, its key features like Proof of Liquidity, EVM identical, and the BeaconKit framework. We will also compare Ethereum vs. Berachain, explore the Berachain ecosystem, and look at its DeFi applications like BEX, Bend, and Berps. Plus, we will cover Berachain tokenomics, details about the Berachain airdrop, and how to get the airdrop.
What is Berachain?
Berachain is a high-performance Layer 1 blockchain designed to be identical to the Ethereum Virtual Machine (EVM). It introduces a unique consensus mechanism called Proof of Liquidity (PoL) to align liquidity and security within its network.
Key Features of Berachain
Proof of Liquidity
In many blockchains, to help keep the network safe, people lock up their tokens in a process called staking. These locked tokens can’t be used for anything else during this time. Berachain does things differently.
It uses a system called Proof of Liquidity, or PoL. In this system, instead of just locking up tokens, users are encouraged to actively use them within the network. This means that while the tokens are still helping to keep the network secure, they’re also being put to work in various applications and services. This approach not only maintains security but also keeps the network lively and efficient.
EVM Identical
Berachain is designed to work exactly like Ethereum’s system, known as the Ethereum Virtual Machine (EVM). This means that any application or smart contract that runs on Ethereum can also run on Berachain without any changes.
Developers can use the same tools and code they’re already familiar with. Additionally, whenever Ethereum gets an update or improvement, Berachain can adopt those changes right away. Also, it leverages Ethereum’s execution clients, such as Geth, Erigon, and Nethermind, to process smart contracts.
BeaconKit Framework
Berachain has its own modular framework called BeaconKit, which improves blockchain performance and flexibility. This toolkit allows developers to build and customize Layer 1 blockchains by adding different components like custom block builders, rollup layers, and data availability layers.
BeaconKit also brings CometBFT, a consensus engine designed for Byzantine fault-tolerant applications, into any EVM-compatible system. With this modular setup, Berachain can easily adapt to new technology needs and support various decentralized applications (dApps)
Ethereum vs. Berachain
| Berachain | Ethereum | |
| Consensus Mechanism | Proof of Liquidity (PoL) | Proof of Stake (PoS) |
| EVM Compatibility | Fully EVM-Identical | EVM-Compatible |
| Native Token | $BERA | ETH |
| Liquidity Incentives | Validators must provide liquidity to participate | Validators stake ETH, no liquidity requirement |
| Governance Model | Uses non-transferable BGT (Berachain Governance Token) for voting | ETH stakers vote on governance proposals |
| Modular Framework | Built with BeaconKit for flexibility and customization | Uses Ethereum’s core framework with optional Layer 2 solutions |
Berachain Ecosystem
The Berachain ecosystem is expanding rapidly, with multiple new tokens set to launch as part of upcoming TGE (Token Generation Events). These tokens will play a crucial role in various decentralized applications, DeFi platforms, and governance systems within the network.
Some of the upcoming tokens include $BEAR from BearCage, $TERP from TerpLayer, and $VAPE from Puffpaw. Other anticipated launches are $WAGMI from Wagmipad, $OOGA from Ooga Booga, and $BURA from Panda Bera. These tokens will contribute to different aspects of Berachain, including trading platforms, liquidity mechanisms, and NFT-based projects.
Berachain DeFi applications
BEX
BEX is Berachain’s native decentralized exchange, often referred to as a DEX. On BEX, users can trade different cryptocurrencies directly with each other without needing a central authority or intermediary. The platform uses something called an automated market maker (AMM) system.
In this system, users can provide pairs of tokens to liquidity pools. When other users trade these tokens, a small fee is generated. This fee is then distributed to those liquidity providers, allowing them to earn rewards over time. This setup not only facilitates trading but also encourages users to contribute to the platform’s liquidity, enhancing the overall health and efficiency of the exchange.
Bend
Bend is a lending platform within the Berachain ecosystem. It operates without taking custody of users’ assets, meaning users maintain control over their funds at all times. On Bend, users can deposit stablecoins, which are cryptocurrencies designed to maintain a stable value, often pegged to traditional currencies like the US dollar. By depositing these stablecoins, users can earn interest over time.
Conversely, those looking to borrow can provide other cryptocurrencies as collateral to access these stablecoins. This system allows users to leverage their assets without needing to sell them, providing flexibility and additional financial opportunities within the Berachain network.
Berps
Berps is a decentralized leveraged trading platform on Berachain. It enables users to engage in perpetual futures contract trading with leverage of up to 100x.
All trading activities on Berps utilize HONEY as the primary token for collateral, deposits, and payouts. By providing liquidity to Berps, users can participate in PoL Reward Vaults and earn governance tokens, further integrating them into the Berachain ecosystem.
Berachain Tokenomics
Berachain has a three-token model designed to keep the network secure, decentralized, and liquid. The three tokens are BERA, BGT, and HONEY, each serving a different role in the ecosystem.
- BERA: It is the main token used for transaction fees, staking, and securing the network. The total supply at launch is 500 million BERA, with an inflation rate of 10% per year, which can be adjusted through governance. The distribution is split between the core team (16.8%), investors (34.3%), and the community (48.9%). Community tokens are used for airdrops, incentives for developers, and ecosystem growth. To prevent sudden dumps, BERA follows a vesting schedule where tokens remain locked for one year, then unlock gradually over the next two years.
- BGT (Berachain Governance Token): It is not tradable and can only be earned by providing liquidity. The more liquidity a user provides, the more BGT they earn. BGT holders control the network by voting on key decisions like protocol upgrades, reward allocations, and governance proposals. This ensures that only active participants influence the system.
- HONEY: This is Berachain’s stablecoin, pegged to the U.S. dollar and backed by a mix of crypto assets. Users mint HONEY by depositing approved collateral into vaults. It is the main currency used across Berachain’s decentralized applications, lending platforms, and trading markets. HONEY helps keep the ecosystem stable by ensuring that transactions and lending markets function smoothly.
Berachain Airdrop Details
Berachain is launching an airdrop for its BERA token, giving away 15.8% of its total 500 million supply to early supporters and community members. This is to reward those who contributed to the network before its mainnet launch.
Who Gets the Airdrop?
- Testnet Users: People who actively used Berachain’s testnets, like Artio and bArtio, will receive a portion of the airdrop. More than 8.2 million BERA tokens are set aside for them.
- NFT Holders: A big share of the airdrop goes to those who own Bong Bears NFTs and other collections likeBoo, Bond, Band, Baby and Bit Bears. If users bridge their NFTs to Berachain, they will also be eligible.
- Community Contributors: Around 1.25 million BERA is allocated for active community members. This includes people who engaged with Berachain on social media and contributed to discussions, but not dApp accounts or team members.
- Binance BNB Holders: Binance is partnering with Berachain to distribute 10 million BERA tokens to people who subscribed to Binance’s BNB to Simple Earn program during a specific period in January 2025.
How to Get Berachain Airdop?
If you are eligible, you can check your allocation using Berachain’s airdrop checker tool. To claim the tokens, you will need an EVM-compatible wallet like MetaMask or OKX Wallet.
Conclusion
In a nutshell, Berachain is a new layer-1 blockchain trying something different. It works just like Ethereum but runs on Proof of Liquidity, not just staking tokens. That means network security and liquidity go hand in hand.
Developers can build here without changing much because it’s EVM-identical. Tokens? There are three Berachain tokens – BERA, BGT, and HONEY – each doing its own job to keep things moving. The airdrop, the ecosystem, the funding – it’s all setting up Berachain to grow fast.
FAQs
What funds has Berachain raised?
Berachain has completed multiple funding rounds, securing a total of $142 million. In 2023, the company raised $42 million in a Series A round led by Polychain Capital, with participation from Hack VC and Shima Capital.
Following this, in April 2024, Berachain secured an additional $100 million in a Series B round co-led by Brevan Howard Digital and Framework Ventures, with contributions from Polychain Capital and others.
Is Berachain a good investment?
Investing in Berachain presents both opportunities and risks. The platform’s innovative Proof-of-Liquidity consensus mechanism and EVM compatibility position it as a promising player in the blockchain space.
However, like all cryptocurrencies, BERA has experienced significant price volatility. Following its mainnet launch and airdrop, BERA’s price saw a substantial decline.
What is the Berachain airdrop?
The Berachain airdrop is a distribution event where the platform allocated 15.8% of its total token supply to early supporters and community members. This initiative aimed to reward participants such as testnet users, NFT holders, and active community contributors.
How is Berachain taxed?
Taxation of Berachain’s BERA tokens depends on the regulatory framework of an individual’s country of residence. Generally, cryptocurrencies are treated as property or financial assets, and transactions involving them may be subject to capital gains tax. Income received from activities like staking or airdrops might be considered taxable income.
