Discussion of Berachain's Ecological 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 discovered in the first test network.

Many ecological protocols have already been deployed on the bArtio Testnet version. As of January 2, according to the Berachain official website, a total of 234 protocols are participating 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 still in the testing network phase, these data show that the market's attention to Berachain and its ecosystem is quite high.

Starting from the end of 2024, Smokey The Bera, the founder of Berachain, announced the "Q5 Launch of the Mainnet". Recently, he introduced Boyco through a social media post, hinting that "Q5 will happen before April," indicating that the launch of the mainnet is imminent. This has also attracted new and old users of Berachain to join the ecosystem.

However, to participate in the Berachain ecosystem, it is essential to understand their PoL mechanism. Before the mainnet launch, the various complex financial products introduced by the 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 performed outstandingly in various areas and detail how each protocol utilizes the PoL mechanism.

DEX

Berachain has a native DEX called BEX, which will be launched on the mainnet as BeraSwap. BeraSwap will support seamless liquidity trading within the ecosystem and ensure the effective operation of the PoL mechanism. Given the existence of BEX, other DEXs preparing to launch on Berachain are also developing 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 features ( that evenly distribute liquidity across the entire price range ), Kodiak also offers CLAMM ( features similar to Uniswap v3, allowing liquidity providers to set and concentrate liquidity within a specific range.

Users can provide liquidity within a narrow range through the CLAMM pool to farm $BGT more efficiently. Additionally, Kodiak also offers an Island feature that helps users automatically reset and balance the CLAMM range, reducing the hassle of managing liquidity supply positions. This feature uses BEX to rebalance liquidity, thus establishing a complementary rather than competitive relationship.

Moreover, due to the customizability of the liquidity range, the tokens of CLAMM liquidity positions are often difficult to use in other protocols. However, Kodiak standardizes the users' CLAMM liquidity positions through the Island feature, allowing the LP tokens to be used in other protocols, which promotes more flexible and diverse ecological gameplay.

Before the mainnet launch, Kodiak has collaborated with many projects in the Berachain ecosystem, establishing its position as 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.

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) 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 over a specific period and execute them at the same price.

• Dreampad: A Launchpad protocol that provides incubation and funding opportunities for projects ready to launch on Berachain, while ensuring a fair token launch 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 fundraising target is not met within 24 hours.

Like Kodiak, Honeypot Finance also plans to operate as a validator after the mainnet launch, offering its governance token $HPOT as delegation rewards to users who delegate $BGT.

In addition, Honeypot Finance releases accumulated $BGT to the $HPOT liquidity pool, thereby enhancing the liquidity of $HPOT. The protocol also plans to increase the token value by using node operating income to buy and burn $HPOT, retaining the reward value paid to $BGT delegators, further solidifying the liquidity of $HPOT.

In addition to the aforementioned Kodiak and Honeypot Finance, there are other protocols advocating for efficient and convenient trading features preparing for the Berachain mainnet, including BurrBear, which supports capital-efficient trading by aggregating more than three underlying assets with similar prices (similar to Curve Finance), 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 a native token authorization structure, general users who do not operate nodes will not be able to receive network rewards.

In order to solve this problem, liquidity staking protocols distribute rewards by accepting the staking of native tokens and delegating node operations, 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 the core infrastructure of PoS networks.

In contrast, although Berachain's node operation requires 69,420 $BERA, its structure allows liquidity providers to earn network rewards calculated in $BGT and liquidity provision interest when they deposit liquidity tokens obtained from ecological protocols into Berachain. Therefore, aside from the differences in methods and sequences, Berachain has essentially built liquidity staking into its network protocol.

Although Berachain requires 250,000 $BERA for node operations on the main network, the structure of Berachain is designed to distribute $BGT rewards and interest to liquidity providers. Therefore, aside from differences in methods and order, Berachain essentially incorporates liquidity staking within the network protocol.

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

In this context, Berachain's liquid staking protocol will provide the $BGT ) voting rights for deciding Emission 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 ecosystem protocols to adopt structures that closely integrate the PoL mechanism.

) 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 to generate $BGT interest while running network nodes. When users deposit LP tokens into these vaults, Infrared uses these tokens to generate $BGT, and users can receive $iBGT (liquidated $BGT) proportional to their deposited LP tokens.

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

• Stake in Infrared to receive rewards generated by nodes.

• Use in other DeFi protocols

• Sell for profit

Therefore, Infrared concentrates and distributes the rewards generated by the PoL mechanism by converting $BGT into a liquid token, benefiting fewer $iBGT stakers while also assisting other protocols in the Berachain ecosystem to incorporate $iBGT into their protocols, allowing their platforms to offer higher returns to their users. Additionally, Infrared plans to introduce new features that will enable them to receive and liquidate the $BERA required 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 on 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 within the ecosystem.

Based on the interconnectivity of the protocol and effective ecological gameplay, Infrared has garnered the attention of many users, currently accepting the most $BGT delegation on the bArtio Testnet. Additionally, 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 on how Infrared will use the delegated $BGT to select the emission of $BGT have not been made public. Therefore, it will be quite important to closely monitor whether Infrared will implement these processes in a decentralized manner, as well as to whom the voting rights of its held $BGT 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 settlement token for $BGT.

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

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

The above are two liquidity staking protocols that are about to be officially launched on Berachain. While 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.