Gate Research: Berachain and Its PoL Consensus -- Who Still Believes in the Public Blockchain Narrative?

Abstract

• Berachain is a Layer 1 blockchain that introduces an innovative Proof of Liquidity (PoL) consensus mechanism. By incentivizing liquidity providers, it enhances network security and efficiency while addressing key issues of traditional Proof of Stake (PoS), such as liquidity lock-up and stake centralization.

• The technical architecture is built on the Cosmos SDK and BeaconKit, enabling modular EVM compatibility and seamless integration with Ethereum tools and smart contract development.
• Its tokenomics involve three native tokens: $BERA (used for gas fees), $BGT (governance token), and $HONEY (stablecoin). The separation of token functions helps reduce stake concentration and encourages more dynamic DeFi activity.
• After its mainnet launch, Berachain’s Total Value Locked (TVL) surged rapidly to $3.26 billion, ranking sixth among public blockchains. However, most of the early TVL is concentrated in a handful of protocols, raising concerns over centralization risks.
• The ecosystem faces potential threats from cartel-like centralization and market volatility. In a bear market, declining staking APRs may trigger liquidity outflows, which could undermine both network security and token value.

• Challenges such as inflationary imbalance, sluggish growth, and inconsistent data indicate that the long-term sustainability and scalability of the PoL model still need to be proven.

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