Berachain (BERA) Launches Proof of Liquidity (PoL) System, Replacing Traditional Rewards Model

The system is designed to replace the traditional way of distributing rewards and incentives in the crypto world

Berachain, the fifth largest DeFi chain with a peak TVL of $5.3 billion and a flagship token that briefly hit $18,82, is introducing a novel Proof of Liquidity system.

This system, designed to replace the traditional way of distributing rewards and incentives in the crypto world, provides greater transparency and efficiency in the decentralized finance ecosystem.

What is Proof of Liquidity and How does it Work?

After several months of development, the long-awaited Proof of Liquidity (PoL) system is launching on March 24.

Everything changes Monday. On March 24th, PoL goes live, and governance proceeds to Phase 1.

Incentives start flowing. New vaults start getting emissions.

Here’s what changes and what's next. pic.twitter.com/wkw10CkWWf

The system introduces an incentive model based on two tokens: BERA as the network staking and security token, and BGT (Berachain Governance Token) which is used to manage reward distribution.

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Validators not only secure the network through BERA staking but also earn BGT emissions which can then be directed to the protocol of their choice. In this way, rewards are given to applications that are truly active and contribute to the ecosystem.

One of the things that distinguish PoL from the conventional Proof of Stake (PoS) system is that the staked assets remain active in the DeFi ecosystem. This means that tokens used for network security can still be lent, exchanged, or used in yield farming.

This opens up opportunities for greater participation and improves overall capital efficiency in the cryptocurrency world.

Vaults and Incentives: Protocols Now Competing to Attract Liquidity

A total of 37 reward vaults have been launched as an initial part of the PoL system. These vaults are smart contracts that can receive BGT emissions and are used by the DeFi protocol to incentivize users.

Protocols like BEX, Kodiak, and Beradrome were part of the initial batch, with liquidity from major assets like BERA, HONEY, BGT, and large stablecoins.

After claiming an incentive from March 25, emissions will increase gradually over three days until they reach the full annualized rate on March 27.

Now, DeFi protocols in the Berachain ecosystem must compete in real-time to attract liquidity and win emissions from validators.

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Rapid Expansion and DeFi Dominance

Since the mainnet launch on February 6, 2025, Berachain has grown rapidly. Currently, the platform records a total locked value (TVL) of IDR 87.7 trillion ($5.3 billion), making it the fifth largest blockchain in the DeFi sector.

The BERA token briefly hit an all-time high of IDR312,483 ($18.82), before stabilizing in the IDR100,000-Rp115,000 range.

The implementation of the PoL system was also welcomed by industry players with great enthusiasm.

With a reward design that blends directly with user activity and protocols, Berachain delivers performance-based economic incentives, not just passive staking. Berachain also launched BeraHub, a transparent dashboard to track vault emissions and allocations in real time.

Overall, with the launch of Proof of Liquidity, Berachain proves itself to be an innovator in the blockchain and DeFi world. This new incentive system creates a more fair, transparent, and efficient ecosystem, while encouraging healthy competition between protocols in attracting user participation.

If this trend continues, it is not impossible that Berachain will become the new standard in blockchain economic design and inspire many other crypto networks to follow in its footsteps.

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