New public chain Berachain: DeFi native L1 with proof of liquidity

Recently, the public chain The competition is becoming more and more intense, and some innovative new public chains are emerging one after another. Aptos, Sui, and Linera under the Move language series are often mentioned and compared. People still have shortcomings in the current public chain and look forward to the emergence of a better public chain. Different builders are also striving to "achieve a perfect underlying network" Fight hard.

Project Introduction

Berachain is a DeFi-based native Layer 1 blockchain.

This project is built on the Cosmos-SDK, through the combination of Cosmos native consensus mechanism Tendermint and Berachain's own liquidity proof consensus , enabling it to provide faster transaction speeds, lower transaction costs, and instant finality.

Berachain creates a new interoperability layer between the consensus engine and the virtual machine, responsible for maintaining the "consensus mortgage" chain native Stablecoins that increase the efficiency of staked capital. Increased level of Sybil resistance compared to traditional proof-of-stake blockchains (POS).

BeraChain aims to coordinate the incentive mechanism between investors, builders and users interacting with the network, with high performance, The extended feature is an EVM-equivalent smart contract and cross-chain interoperability platform.

Economic Model

Unlike Ethereum, which has only one native token (ETH), and Terra, which has two types of tokens (LUNA, UST/SDT), Berachain has three native tokens. They are BERA as a gas Token, BGT as a governance token, and HONEY as a native consensus mortgage stablecoin.

Berachain's "Tri-Token System" originated from the team's belief that each decentralized economy has The three main parts of the network, one is the medium (gas) that both prices the unit of work and executes said work in the form of smart contract execution, and the other is the democratic function of organizing and reaching consensus and making decisions about the future of the network The medium (governance), and the third is the medium (stable currency) for transactions through common stable denominations.

Many public chains can reach the first major part, such as Ethereum, and some newer public chains can pass certain The mechanism uses its gas Token for governance to achieve the first two main parts, but Berachain found that as time goes by, the voting rights of users with the most transactions are gradually decreasing. In order to solve this kind of problem, Berachain tries to separate gas Token and governance Token, and allows users to obtain governance Token by using the network and providing value for the liquidity proof system, thus deriving the "Tri-Token system".

As a governance token, BGT is earned by users who pledge BERA to provide liquidity and increases over time . Users who hold BGT have the right to participate in governance, influence fees, protocols that introduce validator sets, etc., and BGT, as a productive asset, has the right to most of the fees generated from the chain itself through exchanges, stablecoin loan rates, perpetual financing rates, etc. Claim as HONEY.

Analysis of Liquidity Proof

< p>Berachain is characterized by its Proof-of-Liquidity consensus, a Sybil-resistant mechanism that utilizes a "consensus" vault to calculate validator vote weights, distribute block rewards, and incentivize capital flow velocity and liquidity depth.

the user will Various assets are deposited in the consensus vault system to obtain Tokenized shares representing their deposits (similar to ERC-4626, which aims to unify DeFi income standards). These Tokenized shares will be used for governance, and users can also use their own Deposits are delegated to specific validators, thereby distributing consensus voting power to validators of their choosing (similar to DPOS delegated proof-of-stake systems).

The deposited assets will be used to provide liquidity for decentralized exchanges and lending markets, while maintaining HONEY Hook.

It should be noted that in order to balance the witch resistance mechanism, there may be intermittent losses of user assets, but the corresponding users will Earn transaction fees and block rewards.

Recent Development of BeraChain

< p>BeraChain has not yet released a white paper and is still under construction. Currently there is only one NFT project called Bit Bears by Berachain.

Users will be able to pledge various L1, stable currency, blue-chip DeFi Token, etc. on it to the verifier, and will use Block rewards are obtained in the form of Bera, providing liquidity to the ecosystem while securing the network. BeraChain claims that every protocol built on it that operates under Proof of Liquidity will have a vested interest in the future of the network, because their TVL will increase security and Sybil resistance while generating BERA fee Token rewards.

As mentioned above, In order to avoid harming the rights and interests of the most active users, Berachain separates gas and gov. Berachain expects to create the most capital-efficient liquidity pool in DeFi by adjusting incentives.

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