Berachain
What is Berachain?
Berachain is a high-performance, EVM-compatible blockchain that leverages a novel rewards mechanism called Proof of Liquidity. Proof of Liquidity aims to align network incentives, creating strong synergy between Berachain validators and the ecosystem of projects. Learn more about Berachain.
What is Proof of Liquidity?
Proof of Liquidity (PoL) is a reward mechanism that aligns network incentives, creating synergy between Berachain validators, users, and ecosystem projects. When users provide liquidity on venues whitelisted by Berachain governance, they earn a pro-rata share of BGT over time. They can then use their BGT’s governance power to direct BGT emissions towards pools – or use cases – they value most.
Proof of Liquidity looks to address key issues posed by other mechanisms (e.g. Proof of Stake) with a multi-token model, separating the network token (BERA) and governance token (BGT). This separation enables:
- Building liquidity, which contributes to efficient trading, price stability, network growth, user adoption, and dapp success.
- Mitigating centralization, which helps preserve chain integrity, avoid block space manipulation, and prevent monopolies.
- Aligning protocols and validators, which enables coordinated incentives through LP pools, bribes, governance tokens, and more, ensuring long-term sustainability.