Berachain Unveils Public Testnet

Berachain aims to push value to protocols and allows token holders to exchange BGT for tradable BERA tokens.

Berachain, the next layer 1 blockchain made its testnet available to the general public on Thursday. This marked the first time its “proof of liquidity” consensus mechanism, which earned $42 million in funding the previous year, was made available to the public.

The Berachain project is a meme-driven endeavor developed within the Cosmos ecosystem. Cryptocurrency developers who identify themselves online with photographs of cartoon bears, some of whom are smoking pot, make up the majority of its founders.

Some investors, such as Polychain Capital, continued to put money into their idea for a different sort of blockchain despite this fact. It is powered by a new approach for protecting blockchains dubbed “proof of liquidity,” or PoL, a fresh take on the established “proof of stake” model.

Through the provision of liquidity to the trading infrastructure that is constructed on top of the Berachain network, ecosystem players contribute to the protection of the Berachain network under the PoL framework.

An automated market maker, a crypto game, a lending protocol, or practically anything else that requires a pool of user-supplied tokens to conduct transactions via smart contracts are all examples of what might be referred to as infrastructure.

Tokens are frequently used as a form of compensation for liquidity providers (LPers) in decentralized finance (DeFi), which is a type of finance. Similarly, such is the goal for Berachain as well. Any protocol acceptable by a Berachain governance vote will be granted BGT to be distributed to their LPers.

These BGT tokens are the governance tokens for the layer 1 network, meaning those possessing them have administrative authority over the network. It is important to note that the tokens are illiquid, meaning they cannot be bought or sold.

According to Smokey the Bera, Berachain’s cofounder, the only way to get them is to earn them as a prize.In a message communicated via Telegram, Smokey stated that “Berachain is the first chain that is built to push value to protocols.”

The authors of the token want it to have some worth according to the economic system. In return for the corresponding amount of BERA tokens, which will be tradable, any member of the BGT community will be able to burn their assets.

Alternatively, customers can delegate their BGT to other individuals in exchange for the Berachain stablecoin known as HONEY, which Smokey has stated will be backed by USDC funds.

There is no guarantee that Berachain will be wholly protected from economic whales due to the current configuration. Big bag holders might still acquire a large quantity of BERA, supply it as liquidity to trading protocols, and gain outsized BGT, as well as the power that they wield, according to Smokey.

This is even though “you can’t just buy the staking token.”Nevertheless, it is a manifestation of “proof of stake” that is significantly more dynamic than just lending one’s tokens to a validator.

In the context of Berachain, the protocols themselves are the recipients of the liquidity that is generated by all of the users who are looking for economic returns.

Berachain can “achieve more with less beginning resources” thanks to the liquidity bootstrapping arrangement, according to Smokey. Given the many new layer 1 blockchains being introduced and publicized, this distinction might be rather significant.

According to Smokey, Berachain is positioning itself to appeal to the population of Ethereum developers as well as building Cosmos.

Additional dozens of protocols from different ecosystems are getting ready to roll out versions of their project on Berachain, and it has already been in a private testnet for around a month. Additionally, it has more than thirty native teams with members.