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Gate Research: Berachain and Its PoL Consensus -- Who Still Believes in the Public Blockchain Narrative?
Download the Full Report （PDF）
This report presents an in-depth analysis of emerging Layer 1 blockchain Berachain, centered on its innovative Proof of Liquidity (PoL) consensus mechanism. It explores the project’s architecture, tokenomics, ecosystem protocols, TVL dynamics, and governance model. The report also highlights structural risks such as inflation pressure, TVL concentration, and a potential innovation slowdown, while assessing whether Berachain can evolve into a sustainable, liquidity-driven public chain paradigm through continued DeFi and dApp ecosystem development.Abstract
- Berachain is a Layer 1 blockchain that introduces an innovative Proof of Liquidity (PoL) consensus mechanism. By incentivizing liquidity providers, it enhances network security and efficiency while addressing key issues of traditional Proof of Stake (PoS), such as liquidity lock-up and stake centralization.
- The technical architecture is built on the Cosmos SDK and BeaconKit, enabling modular EVM compatibility and seamless integration with Ethereum tools and smart contract development.
- Its tokenomics involve three native tokens: $BERA (used for gas fees), $BGT (governance token), and $HONEY (stablecoin). The separation of token functions helps reduce stake concentration and encourages more dynamic DeFi activity.
- After its mainnet launch, Berachain’s Total Value Locked (TVL) surged rapidly to $3.26 billion, ranking sixth among public blockchains. However, most of the early TVL is concentrated in a handful of protocols, raising concerns over centralization risks.
- The ecosystem faces potential threats from cartel-like centralization and market volatility. In a bear market, declining staking APRs may trigger liquidity outflows, which could undermine both network security and token value.
- Challenges such as inflationary imbalance, sluggish growth, and inconsistent data indicate that the long-term sustainability and scalability of the PoL model still need to be proven.
Gate Research
Gate Research is a comprehensive blockchain and crypto research platform that provides readers with in-depth content, including technical analysis, hot insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.
Click the Link to learn more
Author: Colin
Translator: Sonia
Reviewer(s): KOWEI、Piccolo、Wayne、Evelyn、Elisa
Translation Reviewer(s): Ashley、Joyce
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.io.
* This article may not be reproduced, transmitted or copied without referencing Gate.io. Contravention is an infringement of Copyright Act and may be subject to legal action.
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Gate Research: Berachain and Its PoL Consensus -- Who Still Believes in the Public Blockchain Narrative?
Intermediate4/18/2025, 6:12:17 AM
Download the Full Report （PDF）
This report presents an in-depth analysis of emerging Layer 1 blockchain Berachain, centered on its innovative Proof of Liquidity (PoL) consensus mechanism. It explores the project’s architecture, tokenomics, ecosystem protocols, TVL dynamics, and governance model. The report also highlights structural risks such as inflation pressure, TVL concentration, and a potential innovation slowdown, while assessing whether Berachain can evolve into a sustainable, liquidity-driven public chain paradigm through continued DeFi and dApp ecosystem development.
Abstract
- Berachain is a Layer 1 blockchain that introduces an innovative Proof of Liquidity (PoL) consensus mechanism. By incentivizing liquidity providers, it enhances network security and efficiency while addressing key issues of traditional Proof of Stake (PoS), such as liquidity lock-up and stake centralization.
- The technical architecture is built on the Cosmos SDK and BeaconKit, enabling modular EVM compatibility and seamless integration with Ethereum tools and smart contract development.
- Its tokenomics involve three native tokens: $BERA (used for gas fees), $BGT (governance token), and $HONEY (stablecoin). The separation of token functions helps reduce stake concentration and encourages more dynamic DeFi activity.
- After its mainnet launch, Berachain’s Total Value Locked (TVL) surged rapidly to $3.26 billion, ranking sixth among public blockchains. However, most of the early TVL is concentrated in a handful of protocols, raising concerns over centralization risks.
- The ecosystem faces potential threats from cartel-like centralization and market volatility. In a bear market, declining staking APRs may trigger liquidity outflows, which could undermine both network security and token value.
- Challenges such as inflationary imbalance, sluggish growth, and inconsistent data indicate that the long-term sustainability and scalability of the PoL model still need to be proven.
Gate Research
Gate Research is a comprehensive blockchain and crypto research platform that provides readers with in-depth content, including technical analysis, hot insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.
Click the Link to learn more
Author: Colin
Translator: Sonia
Reviewer(s): KOWEI、Piccolo、Wayne、Evelyn、Elisa
Translation Reviewer(s): Ashley、Joyce
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.io.
* This article may not be reproduced, transmitted or copied without referencing Gate.io. Contravention is an infringement of Copyright Act and may be subject to legal action.
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