Proof-of-Liquidity & Tri-Tokenomics: Why Berachain can be the Future of Blockchain 🌐

Imagine a blockchain that solves today’s biggest DeFi problems and rewards you for participating. Meet Berachain!

One of the most hyped L1 Crypto projects of 2025 is Berachain. This new blockchain redefines the traditional flaws of Proof-of-Stake and Proof-of-Work with its innovative Proof-of-Liquidity consensus mechanism.

Let’s dive deep into the project and try to determine whether it is the next billion-dollar opportunity we should investigate.

What is BeraChain and Why is it unique?

Berachain is the first L1 blockchain network that is going to address the liquidity fragmentation problem. With its innovative and novel consensus mechanism called Proof-of-Liquidity.

Liquidity fragmentation is a big problem in the DeFi space currently. That is the liquidity is siloed between many chains. Berachain is unifying the liquidity into blockchain’s security model to create deep liquidity for the DeFi applications.

Proof-of-Liquidity

Instead of staking your tokens in a vault, the validators should provide liquidity to the network for participating in governance. This will avoid the problems such as

• The higher energy consumption on the Proof-of-Work mechanism
• Underutilized assets we see on the Proof-of-Stake mechanism. Essentially, the locked tokens in PoS are not doing anything other than just sitting in the vault.

PoL will solve these issues as the Liquidity provided will help the DeFi applications and help the ecosystem grow.

Interoperability

Berachain is built on Cosmos SDK and has EVM compatibility. That is the chain is interoperable. Berachain enables seamless interaction with Ethereum-based apps and others on Cosmos chains.

Efficient Reward System

Berachain rewards the users for providing liquidity for PoL and rewards the ecosystem participation. This reward mechanism promotes liquidity provisioning and the growth of the ecosystem.

The DeFi space is growing rapidly with new applications and increased adoption. In the next decade, it is expected to see around 30–50% CAGR in the DeFi space alone along with Web 3.0. Berachain’s innovations and technologies are closely aligned with the DeFi space. That makes it one of the most beneficial projects from the growth of DeFi.

Since, we now know why Berachain is good, let’s have a look at how it reached to current state and who are confident about this project like us !!

Who supports Berachain? From where it Started?

Team

Berachain’s team is pseudonymous. Named Smokey the Bera, Papa Bear, Homme Bera, and Dev Bear. Pseudonymity is common in crypto projects. But, in a project with 211 Million dollars, funding is a bit concerning.

The team started on an NFT project called “Bong Bears”. That was niche-specific. Still saw a trading volume close to 8000 ETH. Pretty good for a niche-specific NFT Project.

Also, the team confirms the experience from projects like Polygon, Aave, Sui, and Mantle. Even though it is not publicly verifiable due to its pseudonymous nature, Funding tells it might be true.

Partners

Berachain has already partnered with 30+ native and 100+ external teams including main players like Pendle, Sudoswap, Redacted, and Abracadabra. Berachain is incubating promising projects like Kodiak Finance and Infrared Finance. Those are closely tied to the ecosystem and chain.

Investors

Berachain has already raised significant funding from multiple rounds from top VCs in the field. Around 211 Million dollars was raised.

The top tier investors like Polychain Capital, Brevan Howard Digital (BH Digital), Framework Ventures, and Samsung Next are involved along with others like Animoca Brands.

From a crypto enthusiast’s perspective, The team’s experience in blockchain development and strong investments adds more confidence to the project.

At the same time, The pseudonymity of the team raises questions on the accountability. And the large investments raise questions on the decentralization and potential sell-offs.

Hoping Berachain will balance everything nicely, let us look at the tokenomics of Berachain !!

How does Tokenomics work in Berachain?

The total supply or distribution details of the tokens are not out yet at the time of writing this.

But, we are going to talk about the new innovative Tri-Tokenomy Berachain introduces

• $BERA: Used for gas fees and rewarding the liquidity providers
• $Honey: Stable coin in Berachain pegged to USD. Only minted against ETH or BTC. That will make the stablecoin backed by real chain assets.
• $BGT: Used for governance. Non-Tradable. No one can buy or sell BGT tokens. These are earned with network activities. That will make the active network participation and governance closely tied.

The tri-token approach looks really good and stable. But, raises concerns about the initial resistance to adopting the new security and token model among the users.

However, The approach looks really solid by untying the underutilized resources from the vaults and putting them towards ecosystem stability and growth. Could this be the future of blockchain token models?

Yes! If the liquidity is increasing and has enough, it will reduce the slippage and promote DeFi participation among normal users. That is essential for the DeFi ecosystem’s growth.

We are going to dive deep into the aspects where we are seeing the team’s effort. It is important because if the team is spending their time and energy on the project, it will transform into something more valuable.

What does the team do to grow Berachain?

Security

Berachain has already completed several audits from popular firms like Halborn, BlockApex, and QuillAudits.

The audits revealed some of the issues in EVM-compatibility and scaling which were addressed by the team during the testnet phase itself. This shows the team’s commitment to improving the chain before it hits the mainnet phase.

Still, Innovations like PoL introduces new risks like any innovations. The team has committed to regular audits with partnerships from Halborn and BlockApex. That shows the team’s commitment to the project and gives confidence to users.

Berachain hinted at a future bug bounty program that will reward ethical hackers by unraveling the unknown or unidentified bugs in the network. It will help the project to identify the risks and eliminate them. If no one finds any, that means the network is solid and strong.

Marketing

I am not sure if I want to boast about their marketing here. You might already know about it. But, I definitely, want to praise the team for their effort to grow a cult-like following.

They have utilized the meme culture tied to their first NFT project and now specific phrases like ‘ooga-booga’, ‘bera morning’, ‘the chain with a bear in it’, etc are all over the Twitter feed from Berachain and their followers.

Apart from that team is doing regular Ask-Me-Anything (AMAs), meetings, and Hackathons. That shows the team’s effort to connect with the common users and educate them.

Also, their social media are active and provide regular updates. That helps in fostering the community’s trust and confidence in the project.

Looking at the effort from the team toward security and marketing, Berachain is doing a really good job. They are fostering the community through many incentivized events and partnering with popular firms to ensure the security of the network.

So far all looks good for the project. But, if we start to think from a different point some of these points are presenting a vulnerable point to us as a user of the platform. Let’s look at what those are.

What we should be aware of and be cautious about Berachain?

Lack of WhitePaper

BeraChain lacks traditional whitepaper. However, it is compensated through detailed documentation of the technologies and community-driven materials. Not a major concern right now.

Anonymity of the Team

Even though, the team’s anonymity is common in meme-like crypto-projects. It is not common on a serious project like this. This raises serious questions about the accountability.

Innovations

Do you think innovations can be something that makes a project a failure? Sometimes. Yes.

Berachain’s Proof-of-Liquidity and Tri-Token system is innovative. But, seems to be complex from a user perspective. There is a possibility of unknown risks introduced due to these innovative mechanisms.

The team’s partnership with auditing firms and effort to educate the community is already mitigating this point. Still, it is a significant risk until we see a wide adoption.

Competition from existing players

The L1 space is crowded with larger players like Ethereum, Solana, and Polygon. Then next-level chains like Aptos, Sui, and Sei. So it is important to consider the difficulty of grabbing market share where these prominent players already rule.

Berachain owns a very small market position in The L1 space. Despite the smaller market share, Berachain saw a huge TVL growth from the public. Hits 1 Billion. That is positive.

Regulatory Risks

Quite common in crypto projects. But, in Berachain the stable coin $Honey pegged to USD makes it critical. So Berachain needs to continuously evaluate and adopt changes and strategies to stay compliant with regulations.

We have now looked at one of the most hyped and innovative projects coming in 2025. Let me summarize what we have discussed for you.

Summary

• Berachain is an innovative L1 project focused on solving liquidity fragmentation, Inefficient incentive models, and interoperability.
• Built on Cosmos SDK and EVM-Compatability promotes interoperability.
• Proof-of-Liquidity provides deep liquidity tied to the blockchain security.
• Berachain received Significant funding from popular VCs like Polychain Capital and Brevan Howard Digital. Raised $211 Million.
• The team is actively involved in marketing and community building.
• Multiple audits completed and ongoing partnership with Funding Firms ensures security.
• Already have an ecosystem with a partnership among 130+ teams like Pendle and Redacted.
• The team is pseudonymous. Raising some concerns over the accountability.
• The tri-Token system might be complex for new users and could hinder adoption.

Now, Let me know what is your take on Berachain. Do you think it will transform the DeFi space in the next decade? Let me know in the comments below.

Don’t forget to share with your friend who is always looking for promising projects in the crypto space. Till the time we are meeting again, take care !!