Berachain Officially Launches Its Proof of Liquidity (PoL) System

This mechanism will enable the users to stake assets in liquidity pools while earning Berachain Governance Token (BGT), the governance token essential for influencing network decisions and directing rewards.

Berachain, a blockchain platform aiming to revolutionize the DeFi ecosystem, has officially launched its Proof of Liquidity (PoL) system. This unique mechanism will enable users to stake assets in liquidity pools while earning Berachain Governance Token (BGT), crucial for voting on network proposals and directing protocol revenue.

Unlike traditional Proof-of-Stake systems, PoL integrates liquidity provision directly into network security. This allows users to actively participate in the network while earning rewards for their contributions.

Key Features of Berachain’s PoL System

The PoL system introduces a dual-token model: BERA, used for transaction fees and validator staking, and BGT, a soulbound governance token earned through liquidity provision.

BGT is an irtransferable token that accrues to users based on the liquidity they provide to the protocol. This token grants voting rights on proposals to upgrade the protocol and decide on critical network parameters.

Validators, who are responsible for maintaining the blockchain and executing transactions, receive rewards based on the amount of BGT delegated to them. This aligns the incentives of liquidity providers and validators, ultimately boosting network security.

This approach is expected to redefine how decentralized finance platforms operate, transitioning from a focus on speculation to encouraging meaningful participation in the protocol.

The launch has already sparked excitement within the community as Berachain’s token has surged over 15% in value since this PoL went live.

Berachain Token Surges Over 15%

At press time, the price of the token stands at $7.84 with a surge of 15.3% in the last 24 hours as per CoinGecko.

The token has seen a recovery of over 100% since March 2023, trading at $3.70 at the beginning of the year. It seems that the launch of the PoL system has pushed the token to reach new highs.

Moreover, analysts are optimistic about the token’s trajectory, speculating that it could reach new all-time highs (ATH) as user engagement increases.

The rollout also marks the beginning of Phase 1 of Berachain’s on-chain governance, further decentralizing decision making within the ecosystem. This move towards complete decentralization is a key aspect of Berachain’s vision for a community-driven blockchain.