Which projects can secure significant funding even in a bear market? It’s definitely Berachain! 🐻
If you haven’t heard of this rising star that raised $142 million during the bear market, you definitely need to read this article! Let’s dive into this honey-scented project!
What Is Berachain?
Berachain is an EVM-identical layer 1 blockchain, built using the Cosmos SDK, and secured by the Proof-of-Liquidity Consensus Protocol.
How Does Berachain Work
What Is EVM-identical
Berachain’s execution layer mirrors the Ethereum Virtual Machine (EVM) runtime environment found on the Ethereum Mainnet.
This means Berachain can utilize existing, unmodified execution clients and seamlessly adopt the latest EVM upgrades like Dencun.
What is Proof of Liquidity
Proof-of-Liquidity (PoL) is an innovative consensus mechanism inspired by Proof-of-Stake (PoS). PoL enhances PoS by introducing an additional soulbound governance token, which determines a staker’s potential reward weight through delegation by others.
This token is also awarded to those who provide liquidity to the chain via governed reward vaults.
(Source: Berachain Core Doc)
The Origins of Berachain
Berachain can trace back to the Bong Bears NFT series launched in August 2021, including Bong Bears, Boo Bears, Baby Bears, Band Bears, and Bit Bears.
After experiencing both bull and bear markets in the crypto space, they decided to design a Layer 1 public blockchain, drawing on past DeFi successes while avoiding their pitfalls, thus giving birth to Berachain.
Compared to decentralization, scalability, security, and interoperability, liquidity serves as the foundation of it all. The team decided to design their own Layer 1 public blockchain, drawing inspiration from successful past DeFi projects, leveraging their strengths while avoiding their weaknesses, thus giving birth to Berachain.
Features of Berachain
Berachain has a tri-token system of $Bera (the native gas token), $Honey (a native stablecoin) and $BGT (the “non-transferrable” Bera Governance Token).
(Source: Berachain Core Doc)
Users who stake $Bera will earn $BGT over time, capturing rewards from the chain’s architecture and their participation in governance.
Unlike PoS blockchains, where staking rewards are tied to a specific token, Berachain supports staking of mainstream assets from other chains. This diverse range of assets boosts liquidity and makes $BGT more accessible.
Will the Tri-Token system break down like Terra?
- $BERA – Gas Token: BERA is the native token of Berachain, used to pay transaction fees and to stake in order to become a validator. Validators must stake BERA to help secure the network and produce new blocks. BERA can be traded and earned by staking liquidity in approved pools.
- $BGT – Bera Governance Token: BGT is a non-transferable governance token that can be earned only by staking $BERA or providing liquidity. $BGT can also be burned 1:1 for $BERA.
- $HONEY – Stablecoin: HONEY is a fully collateralized stablecoin which is soft-pegged to the US Dollar. To get $HONEY, you can deposit whitelisted collateral into a vault, and mint $HONEY against that collateral.
VC’s Funding
On April 12, 2024, Berachain secured $100 million in funding, led by Framework Ventures and Brevan Howard Digital, with participation from Polychain Capital, HashKey Capital, Tribe Capital and others, valuing the company at $420.69 million.
(Source: Cryptorank)
Ecosystem of Berachain
Gateway – The Honey Jar
The Honey Jar is the gateway to the Berachain ecosystem. It is responsible for educating users, promoting ecosystem projects, and facilitating collaborations between various projects. Its webpage is creatively designed to resemble a computer desktop, with all information related to Berachain placed within different software icons.
The Honey Jar has launched the Honey Comb NFT. While specific utilities have not been promised, this NFT provides access to airdrops, whitelist spots, APY boosts, and free NFT minting from various ecosystem collaborations.
Hub – Honeypot Finance
Honeypot Finance serves as Berachain’s DeFi Hub, offering products like the AMM DEX HenloDex and the launchpad DreamPad.
On June 11, they announced the completion of their strategic funding round, led by institutions such as TKX CAPITAL, CSP DAO, AQUANOW, Web3Port, and EnigmaValidator.
DEX – Kodiak
Kodiak is developing an innovative DEX for Berachain, focusing on concentrated liquidity and automated liquidity management. They plan to re-collateralize Kodiak’s liquidity positions as collateral for derivative products and money markets.
In February 2024, Kodiak announced the completion of a $2 million seed funding round, with participation from Amber Group, Shima Capital, Dao5, and Dewhales Capital.
GameFi – Wizzwoods
Wizzwoods is the first pixel-farm game on Berachain, featuring a SocialFi style that allows players to engage across multiple chains. Each chain has its own unique assets, promoting cross-chain integration and further boosting return on investment.
DEPIN – Puffpaw
Puffpaw is a highly anticipated DePIN project on Berachain, supported by Arweave and OrangeDAO. Puffpaw introduces physical e-cigarettes to monitor and record various user data, creating a unique gamified experience by combining DePIN, GameFi, and SocialFi models.
They have partnered with South Korean e-cigarette supplier TREATS, and future plans include the sale of nodes and the launch of the native token $PUFF.
Conclusion
Berachain’s innovative token economy holds the potential to create a positive flywheel effect among ecosystem developers, node validators, users, and projects, potentially sparking new excitement in a market growing weary of high-valuation chains.
In a market weary of high-valuation chains, Berachain’s meme-worthy Bera elements could spark new excitement. We look forward to seeing how Berachain will cheer the on-chain DeFi ecosystem once its mainnet goes live.