What is Berachain, and why the hype?

Berachain is a next-generation Layer-1 blockchain built on the Cosmos SDK, designed for full Ethereum compatibility. It introduces a liquidity-based consensus model that goes beyond standard Proof of Stake (PoS) and Proof of Work (PoW). This unique approach combines network security with liquidity incentives, making it stand out in a crowded space.

Key features setting Berachain apart

EVM compatibility: Berachain supports unmodified Ethereum execution clients like Geth, Reth, and Erigon. Developers can deploy smart contracts with the same tools they already use, including MetaMask and Hardhat.
Proof of Liquidity (PoL): PoL uses staked liquidity to secure the chain, rewarding liquidity providers while ensuring validators are financially committed.
Dual-token system: $BERA and $BGT serve distinct purposes. $BERA is the native gas token, while $BGT handles governance and liquidity incentives.
BeaconKit architecture: A modular framework separates execution and consensus, improving scalability and performance.
Cosmos SDK foundation: Built on Cosmos, Berachain connects to other chains via IBC for cross-chain interoperability.

Proof of liquidity explained

Proof of Liquidity (PoL) transforms how blockchains secure themselves. Instead of staking tokens purely for validation, PoL ties network security directly to liquidity contribution.

How PoL works:

Validators stake $BERA to participate in consensus and secure the network.
Liquidity providers earn $BGT for contributing liquidity into reward vaults.
$BGT can be delegated to validators, boosting their reward share and governance influence.

This system aligns economic incentives between validators and liquidity providers, creating a more stable and liquid network.

How PoL differs from PoS and PoW:

Security foundation: PoL secures the network through active liquidity, while PoS relies on passive token staking and PoW uses computational work.
Token separation: PoL uses $BERA for gas and $BGT for governance, reducing sell pressure compared to PoS chains where one token does both.
Incentive structure: Validators and liquidity providers both get rewarded, unlike PoS, where only stakers benefit.

The dual-token system

Berachain uses two tokens, each with a clear role:

$BERA

Native gas token for transaction fees.
Used for staking validators and network security.
Burnable 1:1 for $BGT.

$BGT (Bera Governance Token)

Non-transferable governance token.
Earned by providing liquidity in PoL-approved vaults.
Used for governance, voting, and influencing reward vault allocations.

The dual-token system keeps $BERA stable while $BGT focuses on incentives and governance without risking price manipulation through market purchases.

Evm compatibility

Berachain brings full EVM support, setting it apart from many Cosmos-based chains. This means Ethereum developers can build on Berachain without rewriting code.

Native execution clients: Supports Geth, Reth, Erigon, and Nethermind.
Tooling integration: Works with MetaMask, Hardhat, Remix, and standard RPC endpoints.
Instant finality: Transactions are finalized faster than Ethereum’s ~13-minute wait time.

This level of compatibility ensures that projects migrating from Ethereum face minimal friction.

Beaconkit as modular architecture for performance

Berachain uses BeaconKit, a modular framework designed for performance, security, and scalability.

CometBFT consensus: Fast, secure, and battle-tested.
Single-slot finality: Transactions finalize instantly, minimizing reorg risks.
Layer separation: Execution and consensus are decoupled, enabling independent optimizations.
Client diversity: Compatible with multiple EVM clients, reducing reliance on a single codebase.

This structure improves both developer flexibility and network stability.

Native defi protocols on Berachain

Berachain has built-in DeFi tools that create a strong foundation for liquidity and trading activity:

BEX: The chain's native decentralized exchange for token swaps and liquidity pools.
Bend: A lending protocol for collateralized loans.
Berps: A perpetual futures trading platform with decentralized leverage.

These core dApps help keep liquidity on-chain while supporting further DeFi expansion.

Governance powered by $BGT

Berachain’s governance relies on the non-transferable $BGT token, ensuring power stays in the hands of active participants rather than speculators.

How governance works:

Proposals: Users with enough $BGT can propose network changes.
Voting: Token holders cast votes during an active period.
Quorum: A proposal passes only if a sufficient amount of $BGT participates.
Timelock and execution: Approved proposals enter a waiting period before being implemented.

The non-transferable nature of $BGT prevents power hoarding and promotes decentralized decision-making.

Why developers should care about berachain

Berachain offers more than just liquidity incentives. Developers benefit from a suite of tools designed for both Ethereum and Cosmos compatibility.

BeaconKit: Modular framework with easy integration for EVM contracts.
EVM support: Full compatibility with existing Ethereum tooling.
Cosmos SDK: Cross-chain connectivity through IBC.

Whether you’re launching a DeFi app, NFT platform, or liquidity tool, Berachain provides a scalable, secure, and developer-friendly foundation.

Berachain is built for defi power users

Berachain’s focus on liquidity-backed security makes it ideal for DeFi users who care about both security and rewards. The combination of PoL, a dual-token model, and native dApps creates a self-sustaining ecosystem where liquidity directly benefits the network.

The next generation of trading and DeFi innovation will be powered by networks like Berachain, where speed, liquidity, and incentives work together to create a balanced, user-driven ecosystem.