Berachain is LIVE, and the hype is real! Why? Let’s have a look at this new, exciting blockchain!
What is Berachain?
Berachain is a Layer 1 blockchain which is built to optimise both security and also liquidity at the protocol level and therefore, creating a more efficient blockchain economy. The project is able to do this by making use of a unique consensus mechanism called Proof of Liquidity (PoL) which is in stark contrast to other major L1 blockchains which traditionally use Proof of Stake (PoS) or Proof of Work (PoW). Let’s have a quick dive into the core features and innovations that make this project unique.
Redefining Consensus: How Proof of Liquidity Powers Berachain
Instead of staking tokens or performing computational tasks to secure the network, users participating in a PoL consensus mechanism participate by providing liquidity. As a reward for this, participants who provide liquidity to the Berachain ecosystem would earn BGT (Berachain Governance Token). As the name suggests, the BGT token is a non-transferable governance token that grants voting power and governance rights within Berachain’s ecosystem. BGT is one of the three tokens that the ecosystem has, with the other two being BERA, the native gas token of the L1 blockchain, and HONEY, which is essentially the native stablecoin of the ecosystem.
This novel architecture creates a link between governance power and liquidity providers, as users who opt to withdraw their liquidity also lose their voting power. In other words, only active liquidity providers influence governance decisions. Network security benefits from this architecture as well, as speculative manipulation is discouraged and long term ecosystem engagement is encouraged since liquidity providers have a real incentive to always stay involved.
Let’s now have a look at two other important features of Berachain which help to further differentiate it from anything else in the cryptoverse.
Seamless Compatibility: Berachain’s EVM Identical Execution & Instant Finality
Ethereum is, without a doubt, an extremely important ecosystem due to its rich developer community, extensive tooling, and dApp diversity. Therefore, EVM compatibility is important. Berachain is fully compatible with Ethereum’s execution layer, which essentially means that developers are able to deploy Ethereum-based smart contracts on Berachain without any modification. Additionally, this also enables developers to make use of tools and frameworks built for Ethereum, such as MetaMask, HardHat, Truffle, and Solidity, and therefore, this lowers the barrier to entry for builders while also ensuring cross-chain interoperability.
Another feature that we must discuss is Single Slot Finality (SSF). SSF enables Berachain to achieve instant finality by having transactions finalised in a single block instead of multiple confirmations. This is made possible using BeaconKit, which is a consensus layer solution that is able to reduce time-to-finality significantly as it eliminates the need to wait for multiple block confirmations. In practice, this means that faster transaction speeds are possible, security is enhanced (as once a transaction is confirmed, it cannot be reversed or reorganised), and users’ experience is improved.
Community-Driven Origins
Berachain’s origin is fascinating. Effectively, Berachain started as an NFT project, which was known as the Bong Bears NFT collection, and due to its success, the project managed to gain significant traction. It can be argued that Berachain was built from the ground up by its community, and slowly, its own community started to envision how the NFT project could transition to a Layer 1 blockchain.
Backed by Giants: The Investors Fueling Berachain’s Rise
Nothing suggests long-term confidence more than top-tier venture capital firms and institutional investors’ backing, and Berachain is truly backed by some of the best out there. Let’s name-drop a few! Polychain Capital, Framework Ventures, and Brevan Howard Digital are among the best VCs out there to back the project, while institutional investors such as Samsung Next, SBI Bank, and Laser Digital by Nomura are also involved. The impact of these investments cannot be overstated, as they accelerate development, help Berachain’s ecosystem to grow, instil credibility, and increase liquidity. Standing on the shoulders of giants indeed!
Berachain’s Expanding Universe
A thriving ecosystem that now comprises over 300 projects within a diverse range of sectors underscores Berachain’s adaptability across different industries. Let’s start by stating that more than 50 native initiatives have collectively managed to raise over $100 million. Binance Labs has been one of the major backers of Berachain’s ecosystem, while at the same time, the project is backed by Polychain Capital, Primitive, Volt, Amber, Spartan and others. The projects within this ecosystem span a variety of sectors, including DeFi, NFTs, consumer applications, gaming, and DePIN, among others.
BNB Stakers Rejoice: How to Tap into Berachain’s Latest Incentives
Holding BNB offers various advantages, especially with initiatives like Berachain’s airdrop program. Binance’s Simple Earn program allows users to stake or lock BNB in flexible or fixed-term products. With regards to Berachain specifically, holders of BNB who have their tokens in these products are eligible for Berachain’s HODLer Airdrop, while the BERA airdrop distribution depends on the BNB balance held during a specific snapshot period. Effectively, to participate you just need to do four simple steps:
Conclusion
Berachain’s main innovation is the PoL consensus, which, with its unique architecture, aligns incentives for validators, liquidity providers, and network participants while at the same time enhancing capital efficiency. Berachain’s EVM compatibility makes it very easy for Ethereum-based projects to migrate to this new L1 blockchain, while its ever-expanding ecosystem and support from VCs and institutional investors are a testament to the potential of the project.
