Understanding the competitiveness of the Berachain ecosystem in one article

Author: Jack Inabinet, Kazu Umemoto, Bankless; Translated by Wuzhu, Golden Finance

What started as a small team of anonymous individuals selling NFTs to their friends has grown into one of the most watched L1 projects this year. Berachain is an EVM-compatible L1 that raised $100 million in 2024 and is rumored to be launching its mainnet soon.

Unlike contemporary Proof-of-Stake (PoS) blockchain designs—which restrict staking to native assets (i.e. ETH or SOL)—Berachain’s novel Proof-of-Liquidity (PoL) consensus mechanism enables stakers to secure the network with virtually any valuable asset, from stablecoins to AMM liquidity provider positions to lending market deposits.

By aligning network token incentives with the economic interests of DeFi users, Berachain is committed to a self-reinforcing growth cycle that promotes market-leading liquidity and yield opportunities, making it a dominant force among layer 1 blockchains!

Pre-Launch Deposit Opportunities

One of the problems applications and blockchains face when they first launch is attracting liquidity. In the past, projects have offered points or airdrop rewards that are farmed, and once users have finished farming, they withdraw liquidity.

To solve this problem, teams like LayerZero, Stargate, Royco, and Enso decided to partner with Berachain to create a platform called Boyco. The platform already seems to be a huge success with over $1.5 billion in total locked value ready to launch on Berachain!

Boyco allows dApps to provide pre-launch liquidity markets for blue chip tokens like ETH and BTC, with a lock-up period for users. This helps dApps secure liquidity before the blockchain launches, putting teams in the best position to attract users immediately after launch.

Here are some of our favorite vaults:

• The Ether.fi BTC vault is one of the most valuable vaults with a total locked value of $435 million and allows users to deposit different versions of Bitcoin such as cbBTC, WBTC, etc. It will be locked for 90 days once Berachain goes live, but in return users will receive Bera rewards and BTC yield opportunities.

• In the Dinero ETH vault, users can lock up their ETH for 1-3 months and receive $100,000 in DINERO distributed to vault users every week.

• The Ethena x Concrete vault is perfect for USDe and sUSDe holders as you will still receive Ethena points but will also be eligible for some Berachain rewards.

Infrared Finance

Infrared is committed to improving the infrastructure around Berachain's PoL mechanism through node infrastructure, treasury, and liquidity staking solutions for BGT tokens.

BGT, the governance token behind Berachain, is a soul-bound token, so it cannot be transferred to another wallet, but can be redeemed 1:1 for BERA. Infrared has proposed a solution, iBGT, which is a liquid version of BGT that can be used in other DeFi protocols and can also be staked through Infrared to obtain delegation rewards. Users can earn iBGT through Infrared’s vault by staking certain LP tokens to receive distributions from validators in the form of iBGT.

Beracana

Since Berachain runs on a PoL mechanism, in order to maximize on-chain rewards, you must try to get as many BGT as possible. Beracana helps with this through its farms, which allow users to stake their HONEY and gain a greater position in their farm pool, thereby earning more BGT rewards.

There is also a lottery arm in Beracana’s protocol, where users deposit 10 USDC and then a winner is randomly selected to win a prize, with a small portion of the prize returned to Beracana. Lottery losers receive a special token, LUSDC, which can be used in Bercana's loser's lottery. In the loser's lottery, users can win NFTs or tokens of projects within the Berachain ecosystem.

BGT Market

While BGT tokens are soulbound, the BGT Market has created a way for these tokens to be "transferable". You can claim it through the BGT Market's smart contract and it will go into its wallet, but you still have full control of the BGT.

You can still redeem BGT for BERA, delegate it to a validator, or sell it in an auction.

Conclusion

Berachain took a different approach in creating its chain compared to other L1s, focusing on creating a community first. The road to launch for L1s is long, but with Boyco having locked up ~$1.5 billion in TVL and ecosystem projects expected to launch with deep liquidity, Berachain is ready to hit the ground running once its chain goes live. If the team can retain users and their capital, long-term success seems within reach!