Berachain is officially set to roll out its long-awaited Proof-of-Liquidity (PoL) mechanism, initiating onchain governance and redefining how security and liquidity interact on the blockchain.
Background:
- EVM-compatible Layer 1 blockchain Berachain (BERA) is entering a new phase with the soon-to-be live deployment of its Proof-of-Liquidity (PoL) system — the foundation of its governance framework.
- Unlike traditional proof-of-stake models, PoL ties network security directly to DeFi activity by rewarding liquidity providers with governance power.
- The network’s architecture revolves around three native assets:
BERA, the gas and staking token
BGT (Berachain Governance Token), a non-transferable governance token earned through liquidity provisioning
Honey, a third token used to direct incentives (not referenced in this rollout but part of the broader design)
- Validators stake BERA to secure the network, but governance influence is driven by delegated BGT, earned only through liquidity contributions. This unique incentive design strengthens the bond between Berachain’s consensus and its DeFi ecosystem.
Why should you pay attention?
- Berachain’s PoL system introduces a novel way to align network security, liquidity provision, and governance. By rewarding users for providing real value via DeFi pools — not just idle staking — the protocol aims to bootstrap long-term participation and resilience.
- This move could serve as a reference model for future Layer 1s looking to optimize both decentralization and onchain utility.
- The system goes live today with a select group of DeFi liquidity pools, with Berachain developers confirming that more reward vaults will be introduced in the coming phases.
Who said what?
- Co-founder Smokey (in prior interviews) has referred to the design as “governance that can’t be farmed by whales alone — it has to be earned through participation.”
- Camila Ramos, head of Developer relations at Berachain noted:
“The industry is fundamentally ruled by mercenary actors and correlated incentive design. Berachain believes that to build an ecosystem that stands the test of time, we must optimize for long-term games from the start.“
Zooming out:
- Berachain’s Proof-of-Liquidity model is emerging at a time when many Layer 1s are reassessing how to decentralize governance while scaling meaningful adoption.
- Unlike conventional staking models, which often lock up capital without generating ecosystem activity, PoL ties a validator’s power to how much real economic participation they attract.
- With $3 billion TVL already bridged to its mainnet via pre-launch platform Boyco, Berachain is positioning itself as a serious DeFi-first blockchain.
- If the model proves effective, it could influence how future L1s and rollups structure governance — especially in ecosystems where liquidity and network security must be mutually reinforcing.
- Investor interest has been substantial, with Polychain Capital, Framework Ventures, and Hack VC backing Berachain in $142 million of total funding.
