Berachain (BERA)

Berachain is an EVM-compatible layer one blockchain, built using the Cosmos SDK, and secured by the Proof-of-Liquidity Consensus Protocol.

Basics

• Based in:
• Started in / Announced on:
• Testnet release: second testnet went live 10th June 2024
• Mainnet release: set to launch its mainnet in the second quarter of 2024 (3-2024)

Audits & Exploits

• Bug bounty program can be found [insert here].

Bugs/Exploits

• Its testnet had a major bug discovered by Whitehat hackers (23-8-2024).

Token

Utility

• From Figment (31-1-2024):

"(Bera Governance Token): ‘The governance token’ and primary token used for Bera governance and staking. BGT is soulbound, non-transferable, and is only awarded for providing liquidity through BEX pools and staking. Users cannot buy or sell the token on the open market. BGT can be burned 1:1 for BERA, but the inverse is not possible.

BGT tokens are paid out to BEX liquidity providers. LPs can deposit different tokens in different proportions depending on a pool’s composition, but all rewards are paid in BGT. "

• From their docs (9-9-2022):

"The system's economics are tied together through a tri-token structure:

1. Bera is the chain’s native gas token.
2. Honey is a USD stablecoin used as a medium of exchange throughout the system, that is minted in part through overcollateralized lending.
3. Bera Governance Token (BGT) is minted to Berachain’s most long-term aligned users and protocols, who are responsible for the control and operation of the blockchain, and who are held to account."

Technology

• Whitepaper or docs can be found here.
• Code can be viewed here.

Implementations

• Consensus mechanism: Proof-of-Liquidity (POL)
• Algorithm: Cosmos SDK / Tendermint
• Virtual Machine: custom-made EVM called Polaris. From Onchain Times (2-4-2024):

"PolarisVM was developed and made open-source by Berachain with the goal of bringing EVM to Cosmos. Polaris is a modular implementation of the EVM that can be easily integrated into any consensus engine or application, including the Cosmos-SDK. In simpler terms, Polaris offers a full-featured EVM with complete interoperability within the Cosmos ecosystem."

• Development language:

Transaction Details

• Capacity (TPS):
• Latency:

How it works

• From Figment (31-1-2024):

"Proof-of-Liquidity (PoL) is designed to incentivize users to provide liquidity on Berachain. Liquidity providers in Bera’s protocol liquidity pools receive rewards denominated in BGT. This is the only token that can be staked to validators, who then produce blocks proportional to the amount of BGT currently delegated to them. Finally, validators can use their delegated BGT to vote on future BGT inflation rewards rates for any liquidity pools on-chain. While eligible liquidity pools are limited to the core chain primitives (BEX, Berps, Bend) as the chain goes live, over time, any smart contract on the chain may be incorporated into PoL such that their liquidity pools may receive BGT rewards. The Berachain team contrasts PoL from PoS by how their consensus better aligns incentives for validators and stakers. Traditional PoS and dPoS (delegated Proof-of-Stake) protocol tokens denominate both governance and gas fees in the same token. When stakers delegate to a validator, the protocol token’s overall liquidity decreases, resulting in higher gas fees and disincentivizing on-chain application usage."

• From their docs (9-9-2022):

"Berachain is an EVM-compatible layer one blockchain, built using the Cosmos SDK, and secured by the novel Proof-of-Liquidity Consensus Protocol. Proof-of-Liquidity (POL), as an extension of Delegated Proof-of-Stake (dPOS), is facilitated by users staking assets to secure the chain, in return for rewards. However, unlike dPOS, Proof-of Liquidity enables users' staked assets to be put to productive use by providing liquidity as a common good. This liquidity is routed through a concentrated liquidity virtualized AMM, and a perpetual exchange, allowing for best-in-class capital efficiency. "

Staking

Many key staking parameters will match Cosmos SDK chain standards, including:

• Unbonding period: 21 days
• Redelegation delay: None (as long as assets are not re-delegated multiple times in 21 days)
• Distribution Frequency: Every 7 seconds to a separate account (does not accrue to existing stake)

Oracle Method

• Both Smokey and Homme invested in RedStone, so likely it will come to Bera (2-7-2024).
• From Figment (31-1-2024):

"The chain is also launching with a fast, accurate, and native oracle powered by Skip Protocol’s Slinky module. Live on testnet today, Berachain’s oracle has both a Cosmos module and EVM precompile. Live price feeds and trading pairs include ATOM/USDT, BTC/USDC, ETH/USDC, TIA/USDT, and USDC/USDT. Price information is sourced from Coingecko, Coinbase, and OKX. Validators can choose to  contribute price pairs to the oracle or use default provider pricing."

Their Other Projects

BEND

• From Figment (31-1-2024):

"Bend is Berachain’s lending protocol. Similar to Aave, users can lend out a variety of crypto assets to be paid out in over-collateralized loans in Bera’s native stablecoin, HONEY. Bend is noncustodial and the only associated fees are standard gas fees, denominated in Berachain’s gas token BERA. It’s important to note here that HONEY is not minted against these assets, but may be borrowed against them.

By borrowing HONEY on Bend, users also earn rewards in Berachain’s non-transferable governance token, BGT."

BERPs

• From Figment (31-1-2024):

"Berps is Berachain’s native perpetual futures (perps) market. Users can trade perps 24/7 on crypto-asset pairs with up to 100x leverage. All trades occur entirely on-chain, and like Bend, Berps is noncustodial. Similar to other perps DEXs, fees are charged for opening levered positions, borrowing other assets, and for closing existing positions. Berps pair prices are set at the median of spot prices via Berachain’s in-house oracle.

For better user experience, Berps also allows One-Click Trading (1CT) using an Externally Owned Account. 1CT allows traders to submit orders without directly interacting with their wallet, reducing time to trade."

BEX

• From Figment (31-1-2024):

"BEX is Berachain’s native Decentralized Exchange. Similar to a traditional DEX like Balancer, BEX allows users to provide liquidity to a pool of assets and be rewarded for swaps that occur in the pool.

In addition, BEX allows for unique asset customizations, with up to 8 tokens in each pool. Any Berachain user can create a new pool permissionlessly using an asset weighting of their choosing. A pool creator can use the traditional DeFi AMM formula (x*y=k) for calculating pooled asset ratios, or set custom weighting ratios and formulas of their own.

In addition to user-generated pools, Berachain will also launch with ‘House Pools’ for popular trading pairs with deep liquidity on Day 1. Liquidity Providers to House Pools will be rewarded with Bera’s Governance Token (BGT) by default.

Finally, Berachain also introduces the concept of MetaPools. In a MetaPool, one LP token is minted to represent a share of another liquidity pool. MetaPool LP tokens can then be used as part of an asset pair in another pool, helping to increase capital efficiency across the chain."

Roadmap

• Can be found [Insert link here].

Competition

The chain is launching with a number of unique features and proprietary tools, including a custom-made EVM called Polaris, liquidity pools powered by validators, and three native tokens.

Team, Funding and Partners

Team

• Full team can be found [here].
• Berachain’s team is mostly anonymous and includes founding team Smokey the Bera, Papa Bear, Dev Bear, and Homme Bear.

Funding

• Raised a Series B of $100M (12-4-2024):

"co-led by @BHDigitalAssets and @hiFramework They are joined by existing and new investors including @polychain, @hack_vc, @tribecap, @Nomura's @LaserDigital_, @HashKey_Capital, @SamsungNext, @NomadCapital_io, @hypersphere_, @Arrington_Cap, @cypher_capital, @TheSpartanGroup, @nolimithodl, @primitivecrypto, @Superscrypt, @ambergroup_io, @AnimocaVentures, @snzholding, @EVG_Ventures, @PortalVentures, @rubikvc, @BaboonVC and more, along with angels including @sandeepnailwal, @ysiu, @antony_btc, Bo Feng and more."

• Raised (15-3-2024) $69M in a fund round led by Brevan Howard Digital and Framework Ventures. Last year, Berachain raised $42 million in a private token round led by Polychain Capital, with participants including Hack VC, Shima Capital, Robot Ventures and Goldentree Asset Management.

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