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

Introduction

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

Many ecological protocols have 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 testnet phase, this data shows that the market's attention to Berachain and its ecosystem is quite high.

Starting from the end of 2024, the founder of Berachain, Smokey The Bera, announced the "Q5 mainnet launch" through a recent tweet on X, hinting that "Q5 will happen before April" and indicating that the mainnet launch is imminent. This has also attracted both 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 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 areas of the Berachain ecosystem to effectively reduce the barriers to user participation. We will discuss projects that have performed outstandingly in various fields and detail how each protocol utilizes the PoL mechanism.

DEX

Berachain has a native DEX called BEX, which will launch 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.

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 that distributes liquidity evenly across the entire price range (, Kodiak also offers a CLAMM ) concentrated liquidity automated market maker ( feature, 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 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 be used by other protocols. However, Kodiak standardizes users' CLAMM liquidity positions through the Island feature, allowing the LP tokens to also be used in other protocols, promoting more flexible and diverse ecological gameplay.

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

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) Honeypot Finance

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

• Henlo DEX: A DEX specifically designed to protect users from MEV attacks, providing limit orders and Batch-A2MM functionalities, allowing for the collection of user orders within a specific period and executing them at the same price.

• Dreampad: a Launchpad protocol that provides incubation and financing opportunities for projects preparing to launch on Berachain, while ensuring a 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 fundraising target is not reached 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 the accumulated $BGT to the $HPOT liquidity pool, thereby enhancing the liquidity of $HPOT. The protocol also plans to increase the token value by using the income from node operations to buy and burn $HPOT, 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 functions preparing for the Berachain mainnet, including BurrBear, which supports capital-efficient trading similar to Curve Finance by aggregating three or more price-similar underlying assets ###, the liquidity aggregator OogaBooga, and the cross-chain abstract trading protocol Shogun.

Liquidity 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 coins, general users who do not operate nodes will not be able to receive network rewards.

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 enhancing the liquidity of the ecosystem. Through these functions, liquidity staking protocols have also become a 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 the ecological protocol into Berachain. 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 mainnet 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 integrates 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 through operating their respective nodes, as demonstrated by Kodiak and Honeypot Finance.

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

( Infrared

Infrared is a liquidity staking protocol incubated in collaboration 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 uses these tokens to generate $BGT, and users can claim $iBGT) that has been settled in proportion to their deposited LP tokens.

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

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

Therefore, Infrared concentrates and distributes the rewards generated by the PoL mechanism by turning $BGT into a liquid token, benefiting fewer $iBGT stakers, while also assisting other protocols in the Berachain ecosystem to incorporate $iBGT into their protocols, enabling their platforms to provide higher returns for their users. In addition, Infrared plans to launch new features that allow 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 function is Kodiak's Island Pool, which we have also briefly introduced in the aforementioned DEX field. After the mainnet launch, the Infrared plan to launch Kodiak's Island Pool ### has been operating in the testnet (, allowing users to use Kodiak's CLAMM for more efficient $iBGT farming, and the $iBGT received can be restaked in Infrared, or can be reinvested into Kodiak's $iBGT/$BERA Island Pool for further $iBGT farming. Of course, users can also choose other gameplay options within the ecosystem.

Based on the interconnectivity of the protocol and 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 collaborated 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 $BGT's Emission have not been made public. 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 it holds will be granted.

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) 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. Users can vote on which liquidity pools should receive $BGT using the $BGT held by BeraPaw. Node operators distribute the reward income generated from staking $BGT to the holders of $LBGT through this method.

BeraPaw's structure divides the utility of the $BGT token into two types of tokens: $LBGT and $PAW, where 1( receives rewards and 2) votes for the $BGT emission pool. Through this structure, users and protocols using $PAW tokens 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 liquid staking protocols that are about to officially launch on Berachain. While these protocols not only allow for more derivative products but also provide users with more gameplay options, they also complicate the ecosystem further. In the Berachain network, the power and status of nodes will be proportional to the amount of delegated $BGT, and the liquid staking protocols providing $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, providing the following features:

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

Unlike typical lending agreements, BEND has two notable 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 lending demand through $BGT, enriching the liquidity of the ecosystem. Users can also execute $BGT leveraged farming by repeatedly swapping borrowed $HONEY back to $WETH, $WBTC and depositing into BEND.

Next, we will discuss in detail the preparation to launch on Berachain.