Berachain Launches Its Innovative Proof-of-Liquidity (PoL) System Today

Berachain, an EVM-based Layer 1 blockchain, is set to redefine blockchain governance by launching its innovative Proof-of-Liquidity (PoL) system today.

Berachain, an EVM-based Layer 1 blockchain, is set to launch its Proof-of-Liquidity (PoL) system today.

This marks the beginning of Phase 1 of Berachain’s on-chain governance, introducing a decentralized approach to distributing its governance token, BGT. The rollout starts with select DeFi liquidity pools, with plans to expand to additional reward vaults in the future.

Integrating liquidity provision into network security and governance, PoL diverges from traditional Proof-of-Stake (PoS) systems. Instead of locking assets in isolated environments for staking, users are encouraged to provide liquidity in designated DeFi liquidity pools.

In return for their contributions, they will earn BGT, a soulbound governance token that cannot be transferred but plays a pivotal role in directing rewards and ultimately, network decisions.

Furthermore, validators will rely on BGT delegations to amplify their consensus influence, effectively tying the network’s security to its liquidity ecosystem. This innovative approach ensures that staked assets remain usable while contributing to the blockchain’s overall functionality and governance.

The blockchain operates with multiple native tokens. BERA is the gas token, used for transaction fees and validator staking, while BGT is at the heart of the PoL system, functioning as the governance token. This separation of roles between tokens ensures a balanced and efficient ecosystem.

Berachain's journey to this milestone began with the launch of Boyco, a pre-mainnet liquidity platform, which amassed $3 billion in total value locked. Following its mainnet launch in February, these funds are now set to be allocated within the PoL system.

Having secured substantial funding in both 2023 and 2024, Berachain is well-positioned to continue its development trajectory.

As Berachain expands its PoL system, the blockchain community will be watching closely to see how this new approach to governance and liquidity impacts the cryptocurrency landscape. By aligning network incentives with ecosystem security, Berachain may be ushering in a new era in decentralized finance.