Berachain, a DeFi-focused EVM-compatible L1 built on the Cosmos SDK, has introduced the Proof of Liquidity (PoL) consensus mechanism. The core team members of Berachain have a deep understanding and research of DeFi and public chains, and they believe that liquidity is the foundation of decentralized finance. They designed their own L1 blockchain, Berachain, to address the liquidity problem on the chain. Polaris EVM, built on Berachain, provides developers with a friendly environment and powerful tools to create efficient and powerful smart contracts.
The PoL mechanism in Berachain works as follows:
1) Users provide liquidity to the BEX (Berachain’s native DEX) pool to obtain BGT (governance token).
2) Users delegate their BGT to validators, who generate blocks based on the delegated BGT.
3) Delegators and validators receive rewards (BERA and HONEY) from the chain.
4) Validators can vote on the inflation of BGT in any liquidity pool.
5) Bribes are distributed to validators by their delegators.
Compared to the Proof of Stake (PoS) mechanism, PoL incentivizes liquidity and enhances security on Berachain. It also decentralizes inflation by distributing rewards to liquidity providers instead of token holders. The three generations of tokens on Berachain are BGT (governance token), BERA (gas token), and HONEY (stablecoin).
The Honey Jar is the entry point to the Berachain ecosystem and plays a significant role in education, project incubation, and collaboration. The Beradrome is a DEX and restaking liquidity market on Berachain, with unique tokenomics and mechanisms. Beradoge is a meme project on Berachain with two NFT series and offers various benefits to NFT holders. Sudoswap is a full-chain NFT AMM liquidity market that focuses on innovation and is set to deploy on Berachain. Beramonium is a blockchain game on Berachain where players can earn gems and exchange them for NFTs from other projects. Redacted Cartel is a DeFi yield protocol incubated by New Order and plans to deploy on Berachain.
Berachain’s three-generation token model separates governance and gas, maximizing liquidity and avoiding conflicts between active users and liquidity providers. With its innovative approach and growing user base, Berachain is expected to lead DeFi innovation and create high liquidity and capital efficiency. However, the future development of Berachain, including project growth, ecosystem expansion, and protocol security, should be closely monitored.
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