What is PoL?
Ok bozos, it's time to focus... Proof of Liquidity is important.
Last updated
Ok bozos, it's time to focus... Proof of Liquidity is important.
Last updated
1) According to Berachain's co-founder,, the success of a blockchain rests on three pillars: capital, developers, and users.
The "problem" with capital, specifically liquidity, is that it tends to move from one blockchain to another.
Every L1/L2 or DApp that launches offers significant incentives at the beginning.
Farmers/users and whales come, make short-term money, and gradually leave for other opportunities.
Blast is a good recent example: people received the airdrop and then moved on.
2) The second problem is that the biggest L1s, such as ETH, are in Proof of Stake:
This means that a lot of capital is locked & staked to secure the network.
This liquidity cannot be used for other purposes (such as lending/borrowing or LPs), so it's a bit of a waste. Berachain also remedies this problem, as the chain's liquidity will also feed the ecosystem instead of remaining locked.
This is where the Proof of Liquidity comes in and enables to:
unlock validators' liquidity
incentives liquidity to remain on the chain over the long term
align the interests of all stakeholders (validators, developers, users)
First, you need to understand that Proof Of Liquidity is a three-token system.
1) $BERA - Token for gas fees (+ condition to be validator)
2) $BGT - Governance (+ rewards) token
3) $HONEY - Native stablecoin
Unlike Ethereum where $ETH or $SOL tokens are used for both gas and governance, here it's separate.
See $BERA as the SOL/ETH of Berachain, you'll be able to buy/sell it on CEXs/DEXs. This will be the token you'll need to validate transactions, and this will be the token you'll need to buy if you want to invest all your money like a bozo.
See $BGT such as points that will enable incentives to be set up between all stakeholders (validators, dapps, users). It plays a crucial role.
See $HONEY as a native stablecoin created by the foundation which will be backed by liquidity deposited in pools (an example of proof of liquidity).
Read on to find out how $BGT works...
