Exploring the Technology, Community, and Future of the Emerging Public Chain Berachain
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Exploring the Technology, Community, and Future of the Emerging Public Chain Berachain
Drawing on the strengths of previously successful DeFi projects while avoiding their shortcomings, Berachain was born.
Navigating Web3 tides with focused insightsAuthor: dt, DODOResearch
Berachain, often referred to as the "Bear Chain," has recently reignited discussions within the crypto community following the launch of its public testnet "Artio." Its cult-like, highly devoted community has kept it on the radar of degens since its inception at the end of 2021. The project gained even broader attention after announcing a massive $42 million funding round in April 2023, led by Polychain and including OKX Ventures—making more people take notice of this uniquely styled Layer 1 blockchain. With the testnet now live, the mainnet launch is likely just around the corner.
This week, Dr. DODO will walk you through Berachain from three key angles: team background, blockchain mechanics, and notable ecosystem projects—giving you a comprehensive look at this soon-to-launch new chain.
Team Background
On April 20, 2023, Berachain disclosed its $42.069 million Series A funding round led by Polychain Capital, with participation from Hack VC and OKX Ventures. The specific amount and date clearly reflect the team’s cultish sense of humor. The four anonymous founders—Smokey the Bera, Papa Bear, Homme Bera, and Dev Bear—describe themselves as crypto-native degens. The name “Bera” is a deliberate misspelling of “Bear,” paying homage to one of crypto’s most iconic terms: “HODL.”
When discussing the team's background, their connection to Olympus DAO cannot be overlooked. According to Smokey, co-founder of Berachain, they were early OHM investors who met in the Olympus DAO community. It began as an NFT project called Bong Bears—a nod to OHM’s Ponzi-inspired mechanism—creating the first rebase NFT collection, which later spawned multiple offshoots: Boo Bears, Baby Bears, Band Bears, and Bit Bears.
Following the broader market crash, this group of DeFi enthusiasts reflected on successful models like Olympus DAO’s Protocol Owned Liquidity (POL) and Terra’s native stablecoin design. Inspired by these ideas—and aiming to retain their strengths while avoiding past pitfalls—they decided to build their own L1 blockchain, giving birth to Berachain.
Source: https://opensea.io/collection/bongbears
Blockchain Mechanism
Berachain is an EVM-compatible blockchain built on the Cosmos SDK using Proof of Liquidity (PoL), powered by Polaris EVM.
As mentioned earlier, the Berachain team holds Olympus DAO’s Protocol Owned Liquidity (POL) concept in high regard, which inspired their innovative Proof of Liquidity consensus mechanism. As Smokey explained, after years immersed in DeFi, they realized that liquidity is the single most critical factor for a project’s success. Therefore, attracting blue-chip token liquidity to Berachain became their top priority from day one.
Under the PoL mechanism, users must provide liquidity (e.g., BTC, ETH) on BEX—the native DEX of Berachain—to receive the protocol governance token $BGT. $BGT serves dual roles: securing the network via node validation and enabling governance voting (such as determining LP pool reward distributions).
Source: twitter
Next comes Berachain’s three-token model. Since $BGT is non-transferable, users pay gas fees using $BERA, which is obtained through a 1:1 one-way burn of $BGT. Drawing inspiration from Terra’s native stablecoin design, users can over-collateralize $BGT in the Honey dApp to mint the native stablecoin $HONEY.
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$BGT: Non-transferable liquidity staking token used for governance and validator bonding.
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$BERA: Gas token minted via 1:1 burn of $BGT.
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$HONEY: Native over-collateralized stablecoin.
Beyond borrowing concepts from Olympus DAO and Terra, Berachain also adopts Canto’s vision of public DeFi infrastructure by launching native protocols including a DEX, lending platform, and perpetual futures exchange. Revenue generated from these native protocols will be distributed to $BGT holders. Notably, the native DEX incorporates Solidly’s ve(3,3) vote-bribery mechanism, allowing validators to vote on which LP pools receive token incentives—and earn bribes in return.
This powerful combination could create a strong flywheel effect, incentivizing more users to supply liquidity to earn $BGT.
Source: twitter
Ecosystem Projects
The Honey Jar (THJ)
No discussion of the ecosystem would be complete without mentioning The Honey Jar (THJ). THJ positions itself as the gateway to the Berachain ecosystem and wields significant influence within the community. It plays a central role in user education, project incubation, and bridging various protocols—essentially functioning as Berachain’s business development arm. Currently, THJ has launched the Honey Comb NFT series, though no concrete utility has been promised yet. Keep an eye on THJ’s Chinese Twitter account and founder Jani’s tweets for updates on upcoming projects.
Beradrome
Another key project is Beradrome—an ve(3,3)-style DEX on Berachain focused on the Restaking liquidity market. The team launched its Tour de Berance NFT series over a year ago and has conducted multiple testnet campaigns. These NFTs are confirmed to receive airdrops of the governance token $BERO upon mainnet launch, proportional to their rarity.
Sudoswap
Sudoswap is an NFT liquidity marketplace currently live on Ethereum. Its focus on NFT liquidity aligns perfectly with Berachain’s core philosophy. Sudoswap has already announced plans to deploy on Berachain post-mainnet launch. Once Berachain goes live, it may act as a bridge for blue-chip NFTs, bringing popular collections from other chains to Berachain with incentives. Sudoswap will be among the first NFT marketplaces to join the ecosystem.
Redacted Cartel
Incubated by the New Order team, Redacted Cartel is a DeFi yield protocol with several sub-products spanning bribe markets and LSD (Liquid Staking Derivatives) liquidity. They’ve publicly stated intentions to launch a new project on Berachain, although details remain scarce. Given Berachain’s built-in vote-bribery mechanics, DeFi protocols like Redacted that specialize in bribe-market strategies are well-positioned to thrive on the chain.
Algebra
Algebra offers backend infrastructure for decentralized exchanges, providing pre-built DEX smart contracts so projects don’t need to develop them from scratch. Their latest product, Algebra Integral V4, is already being tested on the Berachain testnet. V4 supports hooks/plugins functionality and is open for collaboration with any team planning to launch a DEX on Berachain. The offer has been warmly welcomed by Smokey, co-founder of Berachain.
The five projects above represent some of the most promising investments in the Berachain ecosystem prior to mainnet launch—all with tangible products already in development. More protocols are expected to join once the mainnet goes live, so stay tuned.
Author’s Perspective
Compared to traditional Proof-of-Stake (PoS), I believe Berachain’s Proof of Liquidity (PoL) offers superior advantages in both liquidity and security. The PoL mechanism not only creates a flywheel effect to boost Total Value Locked (TVL) but also unlocks liquidity that would otherwise be locked up in native staking under PoS models. By restricting eligible tokens to blue-chip assets, the system enhances security while ensuring high-quality liquidity inflows.
Of course, technology is only one reason behind Berachain’s popularity. Equally important is its strong cult and meme-driven community. In the world of blockchains, community strength is paramount. Projects with passionate, self-motivated communities gain free, organic marketing—giving them staying power in a space where new trends constantly overshadow the old.
Overall, I’m highly optimistic about Berachain’s trajectory in 2024. The team excels at managing market expectations and designing incentive structures with subtle Ponzi-like dynamics. Their architectural approach stands out from the sea of generic L2 chains. Whether it’s Bera team NFTs or ecosystem project tokens/NFTs, users have already seen significant wealth effects. Once the mainnet launches, actively participating in new projects could yield great opportunities. In the meantime, Berachain’s testnet offers various tasks—worth checking out if you have some spare time.
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Dr.DODO
