Berachain, a meme-themed project built on the Cosmos SDK, has launched its public testnet, Artio, effectively marking the launch of its “proof of liquidity” (PoL) consensus mechanism. Berachain’s PoL aims to make security and liquidity incentives more balanced.
Proof of Liquidity, governance and token economy the Berachain way
Berachain had previously run on a private testnet, which had about fifty teams launch contracts every month under a non-disclosure agreement. As part of PoL, ecosystem participants supply liquidity to the trading infrastructure built on top of the Berachain network. This helps to secure the network. Such infrastructure consists of anything that can’t execute smart contract operations without a pool of tokens created by users.
With over a hundred teams from different networks preparing to deploy on both the testnet and the mainnet, there are already more than 30 native teams working on the EVM-compatible Layer 1 blockchain. BGT is Berachain’s governance token, and holders of the tokens have a say over the development of the Berachain network. The liquidity providers of any protocol that has been approved by the Berachain governance will receive BGT.
Also, one cannot buy or sell the BGT tokens but has to earn them as a reward. Eventually, however, BGT will have some economic value. According to the Berachain team, burning BGT assets will allow every holder to get tradeable BERA tokens equal to the value of their holdings. They will also be able to trade their BGT for HONEY, a stablecoin that will be backed by USDC.
The pseudonymous creators of Berachain aim to get more done with less initial funding. All users seeking economic gains are essentially funding the protocols themselves. When Berachain launches its mainnet in the second quarter of this year, it will be usher in data availability solutions, cross-chain messaging and bridging protocols, and custodians.