Discussion of Berachain Ecosystem Features and Overview of Core Projects Before Coin Issuance

Introduction

Berachain is a Layer 1 network featuring the PoL(Proof of Liquidity) consensus mechanism, aligning the interests of validators, liquidity providers, and the protocol. Currently, Berachain is conducting its second test network "bArtio Testnet" to address the issues found in the first test network.

Many ecological protocols have already been deployed on the bArtio Testnet version. As of January 2nd, according to the Berachain official website, a total of 234 protocols have participated in the bArtio Testnet, and the cumulative number of wallets participating in testing Berachain's PoL mechanism has exceeded 2.38 million. Although it is only in the test network phase, this data shows that the market's attention to Berachain and its ecosystem is quite high.

Starting from the end of 2024, Berachain founder Smokey The Bera announced the "Q5 launch of the mainnet" through a recent X tweet, introducing Boyco and implying that "Q5 will happen before April", indicating that the launch of the mainnet is imminent. This has also attracted new and old users to join the Berachain ecosystem.

However, to participate in the Berachain ecosystem, it is necessary to understand their PoL mechanism. Before the mainnet launch, the various complex financial products introduced by protocols to gain an advantage in the PoL mechanism have instead created a significant entry barrier for new users.

This article aims to explore various fields of the Berachain ecosystem to effectively lower the barriers to user participation. We will discuss projects that have excelled in various areas and detail how each protocol utilizes the PoL mechanism.

DEX

Berachain has a native DEX called BEX, which will be launched as BeraSwap when the mainnet goes live. BeraSwap will support smooth liquidity trading within the ecosystem and ensure the effective operation of the PoL mechanism. Given the existence of BEX, other DEXs that are preparing to launch on Berachain are also preparing various more convenient and efficient services and strategies to effectively compete with BEX, in order to attract users and liquidity.

2.1. Kodiak

Kodiak is a DEX that stands out from the Berachain incubation project "Build a Bera". In addition to supporting BEX's Uniswap v2 style feature ( which averages liquidity distribution across the entire price range ), Kodiak also offers a feature similar to Uniswap v3's CLAMM ( concentrated liquidity automated market maker ) that allows liquidity providers to set and concentrate liquidity within a specific range.

Users can provide liquidity in a narrow range through the CLAMM pool to farm $BGT more effectively. In addition, Kodiak also offers an Island feature to help users automatically reset and balance the CLAMM range, reducing the hassle of managing liquidity supply positions. This feature uses BEX to rebalance liquidity, thereby establishing a complementary rather than competitive relationship.

Moreover, due to the customizability of liquidity ranges, the tokens of CLAMM liquidity positions are often difficult to use by other protocols. However, Kodiak standardizes users' CLAMM liquidity positions through the Island feature, enabling the LP tokens to be utilized in other protocols as well, promoting more flexible and diverse ecological gameplay.

Before the mainnet launch, Kodiak has collaborated with many projects in the Berachain ecosystem, establishing its position as a core infrastructure. They also operate their own Berachain nodes as validator nodes, and as of January 3, they have received the second highest BGT authorization in the bArtio Testnet.

2.2. Honeypot Finance

Honeypot Finance is a protocol that supports all aspects of the token lifecycle, from issuing to providing liquidity and effective trading, consisting of the following sub-protocols:

• Henlo DEX: A DEX specifically designed to protect users from MEV attacks, offering limit orders and Batch-A2MM functionality, which can collect user orders within a specific period and execute them at the same price.

• Dreampad: A Launchpad protocol that provides incubation and financing opportunities for projects preparing to launch on Berachain, while ensuring fair token issuance and distribution.

• Pot2Pump: A meme coin issuance platform that provides a safer environment for meme coin issuance and trading, featuring functions such as preventing bot sniping and refunding participating users if the 24-hour fundraising target is not met.

Like Kodiak, Honeypot Finance also plans to operate as a validator after the mainnet launch, offering its governance coin $HPOT as a delegation reward to users delegating $BGT.

In addition, Honeypot Finance releases the accumulated $BGT to the $HPOT liquidity pool, thereby enhancing the liquidity of $HPOT. The protocol also plans to improve the token value by using the income from node operations to buy and destroy $HPOT, while retaining the reward value paid to $BGT delegators, further consolidating the liquidity of $HPOT.

In addition to the aforementioned Kodiak and Honeypot Finance, there are also other protocols advocating for efficient and convenient trading features preparing for the Berachain mainnet, including BurrBear, which supports capital-efficient trading similar to Curve Finance by aggregating more than three price-similar underlying assets (, the liquidity aggregator OogaBooga, and the cross-chain abstract trading protocol Shogun.

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Liquid Staking

In a typical PoS network, network rewards are distributed to validators who hold a certain amount of tokens and operate nodes. Therefore, if the network itself does not have an authorization structure for native tokens, general users who do not operate nodes cannot receive network rewards.

To solve this problem, liquidity staking protocols distribute rewards by accepting the staking of native tokens and operating delegated nodes, allowing general users to participate in network staking. These protocols also issue LP tokens to stakers as proof of how many native tokens they hold, thereby increasing the liquidity of the ecosystem. Through these functions, liquidity staking protocols have also become a core infrastructure of PoS networks.

In contrast, although the operation of Berachain's nodes requires 69,420 $BERA, its structure is such that when liquidity providers deposit the liquidity tokens obtained from the ecological protocol into Berachain, they will receive network rewards calculated in $BGT as well as interest for providing liquidity. Therefore, aside from the different methods and sequences, Berachain has essentially built liquidity staking into the network protocol.

Although the operation of nodes on the Berachain main network requires 250,000 $BERA, the structure of Berachain is designed to distribute $BGT rewards and interest to liquidity providers. Therefore, apart from the different methods and sequences, Berachain essentially incorporates liquidity staking into the network protocol.

However, in Berachain, existing protocols can only provide rewards and gain voting rights by collaborating with validators, or by establishing a self-sustaining flywheel model to kickstart their liquidity pools, as demonstrated by Kodiak and Honeypot Finance, through operating their own nodes.

In this context, Berachain's liquidity staking protocol will provide the voting rights to decide the Emission of $BGT) and the cashing function of (. This allows Berachain ecosystem projects to incorporate the liquidated $BGT into their protocol mechanism without the need to negotiate with validators or nodes. In other words, this makes it easier for ecological protocols to adopt structures that closely integrate the PoL mechanism.

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) 3.1. Infrared

Infrared is a liquidity staking protocol co-incubated with Kodiak through Berachain's "Build a Bera" program.

The Infrared-operated vaults can accept LP tokens from the liquidity pool, generating $BGT interest rates while running network nodes. When users deposit LP tokens into these vaults, Infrared will use these tokens to generate $BGT, and users can claim $iBGT### that has been liquidated in proportion to their deposited LP tokens of $BGT(.

Users can utilize the received $iBGT in the following ways:

• Staking in Infrared to receive rewards generated by the node
• Use in other DeFi protocols
• Sell for profit

Therefore, Infrared concentrates and distributes the rewards generated by the PoL mechanism by turning $BGT into a liquid token, helping fewer $iBGT stakers while also assisting other protocols in the Berachain ecosystem to incorporate $iBGT into their protocols, allowing their platforms to provide higher returns for their users. In addition, Infrared also plans to launch new features that will enable them to receive and settle the $BERA needed for node operation while running nodes and distributing profits.

The best example of effectively utilizing the Infrared feature is Kodiak's Island Pool, which we also briefly introduced in the aforementioned DEX field. After the mainnet launch, the Infrared plan to launch Kodiak's Island Pool ) has been operational in the testnet (, allowing users to use Kodiak's CLAMM for more efficient $iBGT farming, and the received $iBGT can be restaked in Infrared, or re-deposited into Kodiak's $iBGT/$BERA Island Pool for more $iBGT farming. Of course, users can also choose other gameplay options within the ecosystem.

Based on the interconnectivity of this protocol and its effective ecological gameplay, Infrared has gained the attention of many users, currently accepting the most $BGT delegation in the bArtio Testnet. In addition, many ecological projects have also partnered with Infrared and plan to launch various derivative products, indicating that Infrared will become the most important infrastructure after the mainnet launch.

At the same time, the specific details regarding how Infrared will use delegated $BGT to select the emission of $BGT have not been disclosed. Therefore, it will be quite important to closely monitor whether Infrared will implement these processes in a decentralized manner and to whom the voting rights of the $BGT they hold will be granted.

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) 3.2. BeraPaw

BeraPaw is also a liquidity staking protocol, but they do not run their own nodes; instead, they operate a treasury between different nodes and liquidity pools registered with BeraPaw, issuing $LBGT as the clearing token for $BGT.

The governance token of BeraPaw is $PAW, and users can vote on which liquidity pools should receive $BGT using the $BGT held by BeraPaw. Node operators distribute the reward income generated by staking $BGT to the holders of $LBGT through this method.

The structure adopted by BeraPaw divides the use of the $BGT token into two types of tokens: $LBGT and $PAW. 1### receives rewards and 2) votes for the $BGT emission pool. Through this structure, users and protocols voting for $BGT Emission using $PAW tokens can exercise more voting power with relatively less capital. Therefore, protocols seeking initial liquidity in the Berachain ecosystem are expected to actively use $PAW to generate $BGT rewards for their liquidity pools.

The above are two liquidity staking protocols that are about to officially launch on Berachain. Although these protocols not only allow for more derivative products but also provide users with more ways to play, they also make the ecosystem more complex. In the Berachain network, the power and status of nodes will be proportional to the amount of delegated $BGT, and the liquidity staking protocols that provide $BGT liquidation functions are expected to be adopted by many users and protocols, becoming core infrastructure.

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Lending

Berachain also has a native lending protocol BEND, which offers the following features:

• Use $WBTC and $WETH as collateral to borrow $HONEY
• Deposit $HONEY

Unlike typical lending agreements, BEND has two significant features: 1) $HONEY cannot be used as collateral, and deposits of 2) $WBTC and $WETH do not earn interest, but borrowing $HONEY will earn $BGT rewards.

Through this structure, BEND strengthens Berachain's triple token economic structure, generating basic interest for $HONEY while increasing borrowing needs through $BGT.