What Is Berachain? The &#039, Proof-of-Liquidity &#039, Blockchain and BERA Airdrop

Founded by three anonymous engineers, Berachain, a layer-1 bitcoin set to thrive with Ethereum and Solana, will release its mainnet on February 6, 2025.

The community makes use of a new proof-of-liquidity consensus process to better balance system participants ‘ incentives with increasing chain security. &nbsp,

Upon its release, the new EVM-identical bitcoin will try to solve the” cold launch issue” that most first bitcoin face, providing users and first applications with “meaningful interactions” from day one. &nbsp,

How’s all you need to know.

‘EVM-identical’

Berachain is designed as a “high efficiency, EVM-identical” layer-1 bitcoin, meaning it aims to be similar to the Ethereum Virtual System at the murder level. Thus, any major improvements to Ethereum mainnet, like the upcoming Pectra improve, can then be replicated on Berachain. &nbsp,

Programmers who want to distribute their products on new sites can now easily install any software or procedures designed for EVM-compatible chains immediately on Berachain.

Utilizing a novel proof-of-liquidity discussion system, which “borrows” from Ethereum’s proof-of-stake style, the ring launched its second testnet in January 2024.

At the time, Berachain’s v1 Artio testnet used the Cosmos SDK, but the builders immediately realized that Cosmos” may not control the amount of purchases” the testnet was receiving. That ultimately led to the development of BeaconKit, its own modular and editable consensus layer. It was created by Bearchain and claims to switch the network from a monolithic to a modular architecture while achieving a number of technical advantages for EVM chains. &nbsp, &nbsp,

The network’s proof-of-liquidity consensus mechanism and multi-token model set it apart from other blockchains, which aims to be nearly identical to Ethereum in terms of execution.

Proof-of-liquidity

Bitcoin uses the energy-intensive proof-of-work model, while Ethereum uses proof-of-stake to validate blocks, but Berachain will use a novel consensus mechanism called proof-of-liquidity. &nbsp,

The network calls proof-of-liquidity an “extension” of proof-of-stake that “realigns incentives between validators, applications, and users”. With this new consensus mechanism, two tokens are utilized—one for gas and network security ( BERA ), and another for governance and rewards ( BGT). &nbsp,

Similar to how an Ethereum validator requires at least 32 ETH, the cycle begins with a validator stake at least 250, 000 BERA tokens. As validators propose blocks, they then earn rewards from Berachain, paid in BGT. &nbsp,

Validators then use that BGT to award vaults or allowlisted smart contracts where users deposit qualified assets, such as BERA, to receive BGT rewards. For providing liquidity to whitelisted protocols, users earn a receipt token, which can then be staked inside the rewards vaults, ultimately yielding BGT rewards. &nbsp,

The user’s choice’s validator can then redelegate that BGT reward, potentially increasing it for additional rewards. &nbsp,

Berachain tokens

Ultimately, Berachain has three native tokens: BERA, BGT, and HONEY, each of which serves a slightly different purpose. &nbsp,

BERA

BERA is the network’s native gas token, similar to how ETH is the native token for the Ethereum blockchain. In other words, users will require some BERA tokens in exchange for fees in order to complete transactions on the Berachain network. Additionally, it serves as the token needed for Berachain validators ‘ staking. &nbsp,

BGT

BGT serves as the Berchain governance and rewards token and is . Unlike BERA or HONEY, BGT can only be earned by engaging in “productive activities” within the network. In other words, this means that users can only interact with protocols and applications that have allowlisted reward vaults. &nbsp,

Most often, BGT will be acquired by supplying liquidity, like with Berachain’s native decentralized exchange, BeraSwap. BGT can be used as a governance token to cast individual votes on governance proposals, or to delegate it to validators to use on their behalf. &nbsp,

Though BGT is non-transferable, it can be burned in a 1: 1 ratio for BERA, the native gas token. However, the process only works one way, meaning that users cannot burn BERA for BGT. &nbsp,

HONEY

Lastly, Berachain has its own native stablecoin, or a token designed to be pegged to the value of fiat currency. In this case, HONEY is soft-pegged, or in between a fixed or floating rate peg, to the value of the U. S. dollar. &nbsp,

Decentralized exchanges, or DEXs, can be used to convert the Berachain stablecoin, or allowlisted collateral can be deposited into an approved vault.

Berachain airdrop

After much teasing, Berachain made tokenomics and an airdrop eligibility checker available for its BERA airdrop on February 5. &nbsp,

The project’s native gas token will consist of 500 million BERA tokens, with an expectation of 10 % annual inflation. &nbsp,

From that 500 million tokens, nearly 49 % is slated for the community, which includes allocations for Berachain NFT holders, ecosystem research and development, and future initiatives. Of the 48.9 % allotted to the community, 15.8 % or 79 million BERA tokens will be airdropped to the community starting on February 6. &nbsp,

The remaining 50 % of the supply is made up of the contributors to the Berachain ecosystem and its investors. &nbsp,

Approximately 100 million BERA tokens will be unlocked at launch of the network’s mainnet. The other 400 million tokens are pursuant to the same vesting schedule: a one year cliff, at which point one-sixth of the tokens unlock, and then linear unlocks for the remaining share over the following 24 months.

Pre-launch initiatives

Before its mainnet launches, Berachain put a lot of effort into obtaining liquidity and creating incentives, unlike other blockchain launches. &nbsp,

Most notably, the project offered two liquidity bootstrapping initiatives with its pre-launch vaults and Boyco, the project’s pre-launch liquidity platform.

Simply put, before the network launch, users were able to deposit eligible assets like Bitcoin and Ethereum to stack rewards.

This in turn provides a generous headstart in liquidity on the network, allowing protocols, applications, and users to take advantage of those assets from launch.

Users are unable to access the depth and functionality required for meaningful interactions when new blockchains are launched, according to pseudonymous Berachain team member Knower Bera. ” Without meaningful interactions, these users quickly lose interest, and dapps miss out on a prime opportunity for user acquisition”.

In its pre-launch initiatives, Berachain gathered more than$ 3.3 billion in assets, which if ranked by total value locked would make it fifth-largest in that category, ahead of blockchains like Base and Arbitrum, according to February data from DefiLlama.

Berachain’s roots

The Berachain network first grew out of a “rebasing” NFT collection called Bong Bears, which debuted in early 2021. Rebasing, a well-known term in computing, made it possible for Bong Bear NFT holders to receive additional Bera NFTs via airdrops with each “rebasement.”

This led to the creation of Bond Bears, Boo Bears, Baby Bears, Band Bears, and Bit Bears. On Berachain mainnet, one final rebase is anticipated to occur. &nbsp,

Berachain slowly emerged as a rabid community centered on the Bera NFTs, raising more than$ 100 million to develop its proof of liquidity blockchain. &nbsp,

In its tokenomics release, the network wrote that” the NFTs came before the chain, and the NFT holders have been some of the longest-standing and most supportive members of the Berachain community, with countless holders having already started their own dapps or community initiatives within the ecosystem.” &nbsp,

The project was created by three pseudonymous founders—Smokey the Bear, Homme Bera, and Dev Bear—all of which use bear-themed monikers.