Decoding Berachain (or “we fucking love the bears”)

In this article, we are going to delve into one of the most eagerly anticipated projects in the blockchain space, which places the community at the heart of its narrative (and memes) Welcome to the world of Berachain, a realm populated by bears and abounding with honey!

Introduction to Berachain

Berachain is a modular Layer 1 blockchain that harnesses the power of the Cosmos SDK for interoperability and EVM compatibility. It has been under development for the past three years. Originally conceived as an NFT project in 2022, it has evolved into a fully-functional, high-performance blockchain. Berachain’s is built on Polaris, a high-performance blockchain framework for building EVM-compatible chains atop the CometBFT consensus engine.

The project secured $42 million in fundraising on a $420m valuation, demonstrating investor confidence and acknowledging Berachain’s potential to address critical DeFi issues, especially liquidity challenges.

The team

Details about the team are somewhat limited due to their semi-anonymous nature. However, from what we can gather from this presentation, the team is packed with experienced individuals from both the web2 and web3 sectors. Someone says Smokey The Bera was seen at ETH-Denver wearing a bear mask… 👀

The skeleton of Berachain: Polaris

Polaris is the revolutionary framework designed to simplify the integration of an Ethereum Virtual Machine (EVM) into your application. It is built with a clean, easy-to-integrate API that eliminates the need for devs to spend time hacking together their own EVM integration solutions. Polaris framework is highly modular, allowing the user to choose the components that best fit his needs and integrate an EVM environment into virtually any application.

Polaris core principals:

1. Modularity: each component is developed as a distinct package, complete with thorough testing, documentation, and benchmarking.
2. Configurability: Polaris framework is highly configurable, allowing the user to tailor it to his specific needs.
3. Performance: Polaris is optimized to deliver the highest levels of performance and efficiency.
4. Contributor Friendliness: while Polaris is currently licensed under BUSL-1.1, they plan to adjust their licensing to support contributor-based schemes as they approach production readiness.
5. Memes: lol.

Community as the roots

Berachain owes much of its foundational strength to its origins as an NFT/meme project, which established a solid and engaged community base. This is particularly significant as they managed to cultivate a vibrant community even before the product launch.

Inspired from the rebasing elements of OlympusDAO, they integrated this within their NFT collection. Starting with the BongBears which then brought a variety of rebased NFTs into the series. Those NFTs today have a total marketcap of more than $90M, with a lot of speculation behind possible benefits once the chain will be launched.

Currently, there are incentive mechanisms in place to reward users for participating in the testnet, fostering a sense of ownership and involvement among early adopters.

Berachain’s tokens

• $BERA: Serves as the native token of the Berachain ecosystem, primarily used for transaction fees and gas, akin to ETH in Ethereum. It plays a crucial role in facilitating network operations and incentivizing behaviors that contribute to the network’s overall health.
• $HONEY: Berachain’s native over-collaterlised stable coin (150%) stablecoin, designed to provide a stable medium of exchange within the ecosystem. It has the potential to support a variety of DeFi applications and services, ensuring stability in transactions.
• $BGT: The governance token is non-transferrable and underscores a commitment to decentralization and community-led governance. BGT holders have the power to influence the project’s direction, propose improvements, and make critical decisions through voting.

Innovation in the consensus: Proof-of-Liquidity

Berachain introduces Proof-of-Liquidity as a consensus mechanism, offering a fresh perspective on staking mechanisms. This innovative approach permits users to stake a variety of tokens—including but not limited to the native BERA, such as BTC, ETH, or stablecoins—and delegate their stake to validators within a Delegated Proof of Stake (DPoS) framework. This mechanism expands participation and boosts liquidity by not confining it to a single native token. This unique solution aims to:

1. Systemically build Liquidity
2. Solve stake centralization
3. Align protocols and validators

That’s how it works:

1. By contributing liquidity to the BEX pools, participants earn $BGT, the governance token of Bera, which is integral to its Proof of Liquidity system.
2. Holders delegate $BGT to validators
3. Who then produce blocks relative to the amount of $BGT delegated to them, earning rewards for both themselves and their delegators from the network.
4. Additionally, validators have the power to influence future $BGT inflation rates across various liquidity pools.
5. In some cases, validators may distribute bribes to their delegators as an incentive.

The greater the liquidity in the pools, the more secure the chain is likely to be.

CometBFT: the Consensus Engine that powers Berachain

CometBFT is a software designed for secure and consistent application replication across distributed networks, utilizing Byzantine fault tolerance (BFT) to handle failures, including malicious ones. It combines a Tendermint-based consensus engine with an Application BlockChain Interface (ABCI) for processing transactions, allowing for flexibility across various applications. Unlike traditional key-value stores, CometBFT offers BFT security and supports a broader range of applications beyond specific use cases. It provides a more efficient and secure alternative to consensus mechanisms in blockchain technologies like Bitcoin and Ethereum, making it adaptable for both existing blockchain applications and new developments.

Another key characteristic of BeraChain: Precompiles Contracts

Precompiles are specialized smart contracts embedded directly into the Ethereum Virtual Machine, each with a unique address, allowing for efficient execution with predetermined gas fees. In Berachain, these contracts enhance the chain’s functionality by facilitating direct interaction with various Cosmos modules, which would be otherwise inaccessible from the EVM (for example, Ethereum uses precompiles like SHA2-256 for hashing, while Berachain introduces specific precompiles such as a Bank Contract that interacts with the Cosmos SDK Bank Module for transferring and managing balances).

Berachain expands its precompile offerings by integrating some from Polaris’ EVM and adding new ones to support features like Proof-of-Liquidity, governance, and more, through native BEX and oracle services.

Ecosystem

The Bera ecosystem is experiencing unprecedented growth, a rarity for new blockchains which often start as ghost towns. It’s a vibrant hub here, with expectations of hosting over 100 dApps right from the launch. Highlighted below are some of the standout projects:

• DEXes: Notable decentralized exchanges include Bera DEX, Beradrome, and CrocSwap.
• Perpetual Contracts: Avocado Protocol is making waves in the perpetual contracts space.
• Options Trading: Platforms like B2Option and Aori are bringing innovative solutions to options trading.
• Liquid Staking Derivatives (LSD): HiveStaking and Artio Finance are at the forefront of LSD.
• Community Platforms: Bera Land is fostering a strong sense of community.
• Infrastructure Services: Beranames and BeraNodes are laying the foundational infrastructure.

Additionally, the ecosystem is bustling with a plethora of gaming, NFT, and NFTfi projects, totaling at least 75-100 initiatives.

Conclusion

Born as an NFT project, rise as a revolutionary DeFi killer application, its strategic approach to solving liquidity issues, combined with the strength of a community-centric ethos, sets it apart in a crowded space. We damn love its approach: meme-driven TOV with a great know-how; Berachain is stands out as a rich ecosystem ready to host a diverse range of applications.

For once we can say it: we love fucking bears.