Demystifying Berachain: How to raise $42 million?

Original title: "What is the origin of the new public chain Berachain, which raised 42 million US dollars at the beginning?" "

Original Source: Bai Ze Research Institute

Recently, the new public chain Berachain completed a financing of 42 million US dollars, led by Polychain Capital , Hack VC, dao5, Tribe Capital, Shima Capital, Robot Ventures, Goldentree Asset Management, OKX Ventures participated.

Before this, I couldn't find any financing information about it, and it has not yet launched the public test network (expected to launch in the next few weeks). What allowed Berachain to be valued at $420 million right from the start?

The answer may be "Next Generation of Liquidity".

Smokey, the founder of Berachain, once said:

“The Proof of Liquidity Consensus is the first original coordination incentive between protocol-level liquidity and security. Berachain has a unique opportunity to Could be the protocol with the largest total accessible liquidity of any chain in existence - attracting funds in the EVM and Cosmos ecosystems, and facilitating a range of transactional activity while promoting network security. If executed properly, we will build a A protocol for the depth and velocity of capital for off-chain solutions and the transparency and customizability of on-chain ecosystems."

Liquidity is the gold on the chain and the source of DeFi’s living water. Because of it, Curve wars rise and vampire attacks flood. People will inevitably move liquidity to the most exciting/profitable avenues.

You may have heard of PoW, PoS, PoH and other consensus mechanisms, now, let us Take a look at this innovative L1 that uses "Proof of Liquidity Consensus" and aims to become a "DeFi Protochain".

What will the new public chain Berachain do?  

One of the general problems with current L1s is liquidity, the liquidity that flows into them is usually are ephemeral because there are no compelling incentives to keep them. The development team figured this out and Berachain was born.

Berachain is an EVM Layer-1 blockchain built with the Cosmos SDK, compatible with EVM. By combining Cosmos' native consensus mechanism Tendermint with its own Proof of Liquidity, it can provide faster transaction speed, lower transaction cost and instant finality.

What is Berachain's Liquidity Consensus Proof?

It can be simply understood as encouraging verifiers to whitelist assets such as BTC, ETH and stable coins Staking is on the validator vault, similar to dPoS, users can delegate deposits to specific validators, provide liquidity for on-chain protocols, and receive a portion of DeFi protocol revenue and $BERA in return. The more deposits, the more rewards. This can bring rich liquidity to DeFi on Berachain.

White list assets list:

L1 Token: wETH, wstETH, wBTC, wAVAX, wFTM, ATOM, wBNB, $BERA 

Stablecoins: USDC, USDT, DAI, FRAX, BUSDDeFi 

Governance Token: To be launched

Currently, reward distribution for stakers The weight is determined by the team, but it will be determined by governance when Berachain goes online:

L1 Token - 80% (of which $BERA gets 33%)

Stable Coin - 15% DeFi 

Governance Token - 5%

At the same time, the liquidity consensus proof is also a witch resistance mechanism:

Users may experience intermittent loss. In short, it is possible to deposit 10 Token A and only have 9 Token A when withdrawing.

However, users will receive part of the protocol revenue and block rewards.

Using the Tri-Token economic model

Berachain abandons the single native Token commonly used in traditional public chains Economic Model, whose team believes that every decentralized economy should have three main parts that are critical to operation:

One is pricing and execution The medium (Gas) is used to price the unit of work and execute the work with smart contracts; the second is the medium of consensus and decision-making (governance), which is used to organize democratic functions and reach consensus and decision-making; Medium of transaction (stable).

Therefore, Berachain uses the corresponding Tri-Token economic model:

1. $ BERA: Gas Token of Berachain. Issued with 10% inflation, meaning the supply of $BERA will increase over time. By staking your assets, you can earn $BERA block rewards and part of the revenue of the protocol.

2. $BGT: Berachain’s governance token, which can vote on new whitelisted assets. $BGT is non-transferable and can only be obtained by staking $BERA, which ensures long-term consistency for users.

3. $HONEY: Berachain's native over-collateralized USD stablecoin. $HONEY is the money of the Berachain ecosystem, and it is the payment method by which the protocol income is paid to the stakers. It will be over-collateralized by at least 150% to ensure the dollar peg.

This economic model is called "Tri- Token", each Token is assigned a unique role to encourage long-term use by users and maintain consistent liquidity on the chain.

Where did your pledged assets go, and where did the income come from?

Staked assets are stored in validator vaults. As coordinated by the governance system, assets are paired with $HONEY to provide liquidity to the official vAMM, DEX, and lending protocols on Berachain.

At this time, according to the amount of your pledged assets, you will get the corresponding block reward $BERA.

In addition to being used as Gas Token, $BERA can also be pledged to obtain governance tokens $BGT.

Hold $BGT, you can not only participate in the governance vote, but also get the above official agreement part of the income.

Although your assets are pledged and locked, they can be used as collateral to borrow Out of $HONEY. Users can use $HONEY for spot or leveraged transactions, and even borrow $HONEY to buy more assets through "leveraged pledge" to pledge again.

From this point of view, Berachain stakers have such a high The level of asset efficiency, they have a greater incentive to stake on Berachain compared to other networks.

To sum up, Berachain aims to be a DeFi native chain, and the development team designed it from scratch A sustainable consensus mechanism focused on coordinating investors, builders and users.

Under the operation of the liquidity consensus proof, the liquidity of Berachain is synchronized with its utilization rate and market value Growth; every protocol built on Berachain will generate vested interests due to the future of the network, and TVL will increase simultaneously; and users can pledge not only to obtain governance rights, but also to obtain more Token rewards. This again increases network security and Sybil resistance.

Grasp the trends of Berachain ecological projects in advance

Although Berachain has not yet launched the test network, the popularity is gradually heating up. Recently, many native projects have emerged in the Berachain ecosystem.

1. AMA

CrocSwap: with Berachain Integrated native AMM DEX.

Goldilocks: AMM and NFT lending platform that provides multiple income strategies.

Beradrome: AMM focused on capital efficiency. A fork of the star project Velodrome on Optimism.

2. Borrowing

Stacking Salmon: A loan protocol that provides borrowers with leveraged returns.

BeraCreek Finance: Lending protocol with segregated pools.

3. Yield Aggregator

Hiberanation: Similar to Beefy Finance, it is an automatic compounder dedicated to profit maximization strategies.

4. NFT market

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GumBall: An NFT market focused on NFT liquidity.

BeraMarket: NFTFi + NFT lending.

5. GameFi

Honey Pool: Savings + bonus agreement, allowing users to deposit in USDC to participate in the daily lottery draw. The bonus is the interest generated by all deposited USDC. USDC can also be withdrawn at any time.

ChainBet: On-chain gaming platform.

Beramonium: A single player RPG. These include an in-game marketplace where players can trade loot, and an in-game economy driven by players.

6. Option agreement

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B2 Option: native on-chain option protocol.

7. meme project

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Baby Bear: meme project with NFT and DeFi yield farm.

Bera INU: A meme project.

8. NFT Series

Without Bone Bear, there would be no Berachain (the chain was built by the Bone Bear team). Launching in August 2021, Bond Bears is a successful NFT series. The collection has undergone 5 rebases to form new collections such as: Bond Bears, Boo Bears, Baby Bears, Band Bears, Bit Bears.

Bong Bear NFT provides holders with the following advantages.

These NFTs may be associated with $BGT (NFTs may also become whitelist assets that can be pledged by users in the network)

Get the airdrop of the Berachain ecological project

Get a new rebase

9. Settled projects

Redacted Finance: A DeFi ecosystem that provides on-chain liquidity and governance for DeFi protocols.

Protectorate: A protocol designed to increase deep and sustainable liquidity for NFT and NFTFi protocols .

OlympusDAO: OlympusDAO invested $500,000 in Berachain. Strategic partners participate in the network. Additionally, OlympusDAO will deploy Olympus Pro on Berachain.

dAMM Finance: An unsecured lending platform.

Synapse Finance: a cross-chain DEX.

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