Everything about PoL

What is BeraChain’s PoL?

First, let’s start with BeraChain's tri-token model:

$BERA: This is BeraChain's native token. It’s transferable and primarily used for gas fees.

$BGT: The governance token, which is non-transferable. This token is central to BeraChain’s PoL system.

$HONEY: A stablecoin.

Moving onto the PoL mechanism – Berachain adapts the ve(3,3) system, similar to what's seen in Curve Finance, to a whole new blockchain level.

Here’s how it all works in the PoL system:

> You acquire $BGT by adding liquidity in BeraChain's native dApps.

> You assign $BGT to validators (individuals who run computers to validate blocks). The more $BGT a validator has, the more blocks they can mine.

> The validator mines blocks and, in return, both the validator and those who assigned them $BGT earn $BERA.

> Validators use $BGT to vote how new $BGT tokens are distributed across different liquidity pools in BeraChain.

> If you’ve delegated your $BGT to a validator, sometimes they'll offer extra rewards as a thank you for your support and to attract more delegators.

Compare PoL and PoS

(I won't discuss PoW here as it represents the old-school method; it's not energy-efficient, environmentally friendly, or relevant to blockchain assets. To be honest, it's become outdated)

PoS

  • Makes the network less liquid because a lot of tokens are locked up and not being traded
  • Centralizes power because the same people keep earning more tokens and getting more power
  • Not always provides enough incentives for those running the network nodes

PoL

  • Users provide liquidity to earn BGT tokens, so liquidity is in use.
  • Governance token and fee token are two different tokens -> better liquidity and making the system more efficient.
  • Provides rewards for not just validators and delegates but also liquidity providers ->  more actors contributing to the ecosystem get rewarded.

How can projects take advantage of PoL?

Projects on Berachain, such as those with their own tokens, can greatly improve incentivization models through the following steps:

Step 1: Start by setting up your own node or validator on BeraChain. This allows your project to participate directly in block validation.

Step 2: Use your validator to vote for your project's liquidity pool, such as X/HONEY. By voting for your pool, you have increased the $BGT emissions to that pool. Higher $BGT emissions mean greater rewards for those who add liquidity, making your pool more attractive.

Step 3: Offer your own token, $X, as an additional incentive for $BGT holders to delegate their tokens to your node.  As more $BGT is delegated to your node, your voting power increases. This enables you to further support your liquidity pool by channeling more $BGT emissions toward it.

Step 4: Continue this cycle - more delegated $BGT leads to more voting power, which leads to more emissions for your liquidity providers, thereby continually improving the attractiveness and liquidity of your pool.

This strat is soooo effective for DEXs and lending protocols, which manage multiple liquidity pools. With PoL, these platforms can create a multi-layered incentive system that not only boosts liquidity but also aligns the interests of token holders and liquidity providers.

If Andre Cronje made ve(3,3), Berachain has created ve(4,4).

Notable names on Berachain

Currently, there are 3 native dApps on Bera, and these are all in-house developed by Bera team, so i wont go deep into them.

BEX - an AMM DEX, much like a Uniswap fork. Here, you can swap cryptos. Plus, you can become part of the market by providing liquidity and earning fees on trades.

BEND - This one's a lending platform, a Aave fork. At BEND, you can lend your tokens to earn interest, or if you need some cash, you can borrow by putting down some crypto as collateral.

BERPS - Similar to GMX, it offers a platform for trading perpetual contracts.

I've covered a lot of technical details, and you're probably all caught up by now. So, for the projects I mention below, we'll still discuss the product but focus more on their culture, content, and community aspects. Now, let’s go deeper into some notable names:

  • Kodiak Finance

Kodiak is developing a DEX that's all about concentrated liquidity and easy-to-manage strategies for liquidity providers. Their selling point: The Kodiak Islands - set-and-forget options for LPs to earn rewards smoothly and use other apps within the ecosystem without a hassle. Kodiak also has the Panda Factory, a no-fuss tool allowing users to launch new tokens easily.

Kodiak is focused on making DeFi simpler and more rewarding for everyone - from seasoned traders setting up complex liquidity positions to newcomers happy to let Kodiak handle the details.

To conclude, Kodiak is Uniswap V3 with some significant improvements, and most importantly, with bears.

The project closed a seed round with $2M raised from good names like Amber, Shima Capital. This is impressive considering that Berachain isn’t on mainnet yet, and it’s the same as Kodiak. 

The most noticeable thing is: Kodiak’s marketing team is retarded (in a good way). They know the content, the memes, and know ‘Beratardio’. If this is not bullish, nothing will.

  • Beradrome

Beradrome describes them as a coordination hub for Berachain’s ecosystem incentives. The project uses a three-token model to create demand for BGT in its own unique way. The three tokens - BERO, hiBERO, oBERO—each cater to different users.

Beradrome's bonding curve facilitates interest-free borrowing, single-sided liquidity provision, and call options. 

When users swap BGT for BERO tokens, each BGT backs a BERO 1:1. The curve then adjusts the market and floor prices accordingly. oBERO holders can exercise their tokens at a fixed floor price, while hiBERO holders can lock BERO for swap fees, governance power, and borrowing opportunities. 

If you're looking for more ways to use your BGT, Beradrome’s model  and community-focused features have you covered.

  • Yeet

Yeet is branding itself as the "bremier bonzi" on Berachain and has cooked up a super retarded game for everyone. It's pretty straightforward: you throw ("yeet") your BERA tokens into a pool, and if you're the last one to do it, you win all the tokens. Players can also farm YEET tokens by participating, which adds an extra layer of fun and reward. These tokens can be farmed or bought and used to increase your stake in the game.

What sets Yeet apart isn’t just the game itself. Every time you yeet your BERA into the pool, 7% of it goes to people staking YEET tokens. So, while someone is having fun trying to time perfectly, you as a YEET stakers could also be earning some serious money. It's a simple ponzi flywheel, and I like it.

If Kodiak nails the content, Yeet is killing it. Big shoutout to Lord Pemberton Squigglebop, the guy who has delivered the most retarded character ever in not just Berachain, but in this industry.

  • Kingdomly

Kingdomly Creator is a no-code NFT launchpad that simplifies the process of creating and launching NFTs for creators without technical skills. It handles everything from generating unique NFTs to uploading data on a secure, decentralized system and crafting essential smart contracts. This lets creators to focus on their art while Kingdomly manages the technical details.

Kingdomly pricing model really favors creators. Instead of high upfront fees, Kingdomly charges a small percentage from sales and a nominal flat fee per NFT minted. This approach makes it affordable for creators to launch their projects and spreads the cost among buyers.

From my perspective, in a blockchain ecosystem rich with cultural interactions like Bera, NFTs are likely to become incredibly dominant. Projects like Kingdomly are crucial because they bridge the gap between end-users and the complex coding typically required to engage with blockchain. Who isn't bullish on this?