Berachain

• Berachain is a Layer 1 using Proof of Liquidity, where validators are selected by the liquidity they attract rather than by stake alone.

• It runs a three-token system: BERA for gas, BGT as a non-transferable governance token earned by providing liquidity, and HONEY as its stablecoin.

• BERA is the gas and staking asset.

• BERA is the transferable gas token; BGT is earned through liquidity provision and cannot be traded.

• BGT can be burned into BERA one-way, but not the reverse.

• This structure ties governance power to liquidity commitment rather than purchasing power.

Pros:

• Proof of Liquidity aligns security with usable liquidity rather than locked idle stake.

• The non-transferable governance token makes vote-buying harder than in standard designs.

• Launched with a large ecosystem of applications already deployed.

Cons:

• The three-token system is genuinely complex and most users will not model it correctly.

• Activity fell substantially after the launch incentive period, a pattern common to heavily incentivised launches.

• Proof of Liquidity is novel and its security properties are less studied than proof of stake.

• Exposure to a Layer 1 with a genuinely different consensus economic model.

• Alignment between security and liquidity is a real design contribution.

• Weigh the complexity and the post-launch activity decline.

• Consensus that rewards validators for the liquidity they bring rather than the capital they lock, so securing the chain and making it usable are the same act.

• Proof of stake locks capital away from productive use to secure a chain, so security and liquidity compete for the same money.

• Proof of Liquidity makes providing liquidity the way to secure the network, removing the tradeoff.

• Founded by pseudonymous contributors known as Smokey the Bera, Papa Bear and Dev Bear.

• Backed by Polychain, Framework Ventures and Brevan Howard Digital.

• No public ICO. BERA was distributed through airdrop and ecosystem allocations in February 2025.

• Novel consensus with less security analysis than established mechanisms.

• Activity proved highly incentive-dependent after launch.

• Three-token complexity raises user error risk.

• Pseudonymous founding team.

Berachain's documentation argues that proof of stake creates a structural conflict: capital staked for security is capital removed from liquidity, so a chain must choose between being secure and being usable. Proof of Liquidity resolves this by making liquidity provision the path to consensus participation — validators are weighted by the liquidity directed to them, and the governance token that controls this is earned rather than bought and cannot be sold. The papers are explicit that the design's safety depends on the non-transferability holding, since a liquid governance token would collapse the mechanism back into ordinary stake-weighting with extra steps.