Berachain Launches Proof of Liquidity System
The long-awaited Proof of Liquidity (PoL) system was activated by Berachain on March 24, introducing a new incentive framework to redefine block rewards distribution. The network’s native token, BERA, saw a 16% increase over the past 24 hours, trading at $7.89 at press time.
Introduction of Reward Vaults
- 37 reward vaults are now live on the blockchain.
- These vaults are smart contracts eligible to receive BGT emissions for reward distribution.
Vault Incentives and Claimability
According to the official announcement, vault incentives will be claimable by March 25, with emissions ramping up to full annual percentage yield (APY) over the next three days. This marks a reduction from the previous seven-day timeline. Berachain has quickly risen to become the fifth-largest blockchain by total value locked, reaching $5.3 billion in less than two months.
Understanding the PoL Framework
The Proof of Liquidity mechanism operates through a dual-token model. Validators stake BERA for security and rewards, while investors utilize BGT for governance and block reward allocation.
Validator Economics and Distribution
- Validators receive BGT emissions based on their delegated BGT boost percentage.
- Emissions are directed to the reward vaults chosen by the validator, enabling protocols to use them as user incentives.
Competing for Liquidity
The launch of Proof of Liquidity aligns block reward issuance with application usage and user engagement through a live incentive layer. Protocols within the Berachain ecosystem will now compete to attract liquidity by offering compelling vault incentives.
BeraHub and Real-Time Tracking
- Berachain has introduced the BeraHub for transparency in rewards flow and distribution.
- Decentralized application teams are integrating metadata associated with the vaults to enhance user experience.
