Berachain is a layer 1 blockchain built using Cosmos SDK(Software Development Kit) and compatible with EVM(Ethereum Virtual Machine). The Blockchain is secured by the novel proof-of-liquidity consensus protocol. The main objective of the project is to allow users to stake token while providing liquidity to DeFi(Decentralized Finance) protocols in parallel. The platform is governed by a tri-token system that is, bera – the native gas token, honey – a native stablecoin and BGT – the non-transferable Berachain Governance Token. The platform allows users who stake bera or any permissioned tokens to earn BGT over time. As a reward for their participation in governance, the users can “capture honey generated by the underlying architecture).
Berachain co-founders pseudonymous and the project is their second after Bong Bears – an NFT project with a collection of “hundreds of absolutely zooted NFT bears getting baked”.
The DeFi-focused firm, recently announced that it had raised $42 million in a series A funding round that was led by Polychain Capital. The funding round also saw participation from other venture capitals including Hack VC, dao5, Tribe Capital, Shima Capital, CitizenX Crypto Ventures and Robot Ventures. The funding event was completed in December at a market valuation of slightly above $420 million.
The firm was co-founded by a quartet of pseudonymous founders namely Smokey The Bera, Papa Bear, Homme Bera and Dev Bear. According to reports, the term Bera is “Bear” intentionally misspelled. At the time of launching Berachain, the team was inspired by rebasing protocol OlympusDAO which was rapidly gaining traction in the crypto community. OlympusDAO had a token named OHM that as of 2021 was retailing at $1 300 per unit but has since fallen to $10 per unit. The pseudonymous founders then launched Bong Bears to follow OlympusDAO with its own first ever collection of rebasing NFTs.
By implementing the novel Proof-of-liquidity protocol, Berachain says that its technology will allow staked assets to be used in DeFi protocols therefore, creating more liquidity and on-chain capital efficiency. Staked assets for instance staked ETH(Ethereum) are locked so as to secure the underlying blockchain network but, Berachain’s Proof-of-Liquidity protocol allows users to stake their assets on its platform simultaneously and use them to trade, borrow or lend on-chain. According to a press release, the firm already has $250 million in capital committed to its deployment plans in coming weeks including its testnet launch.
