Why we’re betting on Proof of Liquidity
At Infrared, we’re heads down building infrastructure to unlock the full potential of Proof of Liquidity (PoL). Our products, including iBGT and iBERA, seek to further simplify participation in PoL, enabling users to stake, earn, and manage liquidity more efficiently. But why is PoL so important, and what makes us so confident in its future? Let’s discuss.
The innovation behind Proof of Liquidity
Proof of Liquidity addresses one of the fundamental challenges in our industry: balancing security with liquidity. While traditional blockchains using mechanisms like Proof of Stake prioritize network security, they often lock up liquidity, stifling economic activity. PoL flips this dynamic on its head by making liquidity provision a core part of the network's security model. Users who provide liquidity on Berachain are rewarded with BGT (Bera Governance Token), aligning the incentives of validators, users, and applications in a way that promotes long-term growth.
This system creates powerful new opportunities for applications and users alike. By tapping into PoL emissions, dapps on Berachain can generate native yield, making it easier to attract users and grow liquidity. The result is a dynamic ecosystem where liquidity fuels innovation and where capital stays active, rather than being locked away or drained by short-term incentives.
Our role in the PoL ecosystem
As we’ve discussed many times on this blog, we’re dedicated to providing as many tools (e.g. iBGT and iBERA) that make it as easy as possible for users and builders to take advantage of PoL.
With iBGT, users can earn a liquid, composable version of BGT, which is otherwise soul-bound to their address, allowing them to maintain liquidity while still earning rewards. Similarly, iBERA allows users to stake their BERA tokens without locking them in validators, enabling them to earn Berachain staking yield without sacrificing liquidity. These solutions remove any and all friction users could run into when experimenting with Berachain, but it doesn’t stop there.
Another key benefit of our products is the opportunities they create for builders. Using Infrared as a foundational piece of infrastructure within Berachain dapps creates flywheels for protocols and users that would otherwise be quite difficult to implement and manage. And there’s already a lot of flywheels spinning–scroll our X account and see for yourself.
By making liquidity and yield more accessible in this way, Berachain will become one of the primary hubs for decentralized finance. This is a goal we don’t take lightly.
Looking forward
We believe that Proof of Liquidity has the potential to reshape DeFi. Sounds crazy, but admit it… it’s been a while since “DeFi summer” in 2021 and not much has happened on the cutting edge since then.
With PoL, the Berachain ecosystem is positioned to become the go-to chain for experimentation, where new dapps can flourish. For example, could Vape-2-Earn be built anywhere else? By betting on Proof of Liquidity, we’re betting on a future where DeFi is exciting again for users and builders.
Join us 🐻⛓️