Berachain is taking a major step forward with its proof-of-liquidity (PoL) system, extending governance and reward distribution beyond its native exchange, BEX.
According to a recent blog post, Starting March 24, decentralized applications (dApps) can apply for incentives through new reward vaults, expanding participation in Berachain’s ecosystem beyond just liquidity pools in BEX. Approved vaults will include liquidity pools from various DeFi protocols, promoting a transparent allocation process influenced by users. More projects will be added over time.
Unlike traditional proof-of-stake (PoS) systems, where tokens are locked for security and often removed from active use, Berachain’s PoL model keeps assets engaged in DeFi. This approach prevents network stagnation, as validators redistribute some rewards back into the ecosystem instead of retaining them. BGT’s governance token empowers holders to vote on which validators and projects receive funding, shaping the network’s future growth.
The first batch of reward vaults prioritizes decentralized exchange (DEX) liquidity pools, facilitating seamless token swaps. Selected pools include those on BEX, Kodiak, and Beradrome, featuring key assets such as BERA, HONEY, BGT, and major stablecoins.
Since launching its mainnet on February 6, Berachain has seen rapid growth, amassing $3.1 billion in total value locked and nearly $1 billion in circulating stablecoins. Trading volume in February alone reached $1.9 billion, according to DeFiLlama data.
However, the project faced criticism over its token rollout. Berachain’s pseudonymous co-founder, “Smokey the Bera,” admitted in an interview on the Unchain podcast that too many tokens had been sold to venture capitalists before launch.
Traders expressed concerns on February 11 regarding airdrop allocations, tokenomics, and possible insider trading related to Berachain. Analysts noted that early investors gained significantly from the network’s staking mechanism. The native token, BERA, initially surged $18.82 before stabilizing between $6.03 and $6.93. As of March 24, Berachain’s market capitalization stood at $728 million, with a fully diluted valuation of $3.37 billion.
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