Discussion of Berachain Ecosystem Features and Overview of Core Projects on the Eve of 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 participated in the bArtio Testnet, and the cumulative number of wallets participating in testing Berachain's PoL mechanism has exceeded 2.38 million. Although this is only in the testing network phase, these data show that the market's attention to Berachain and its ecosystem is quite high.

Starting at the end of 2024, Smokey The Bera, the founder of Berachain, pushed the "Q5 launch mainnet" and recently introduced Boyco through a tweet on X, suggesting that "Q5 will happen before April" and indicating that the mainnet launch is imminent. This has also attracted new and old users to join the Berachain 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 protocols to gain an advantage in the PoL mechanism have created a significant entry barrier for new users.

This article aims to explore various fields of the Berachain ecosystem to effectively lower the participation threshold for users. We will discuss projects that stand out in each field 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 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.

Kodiak

Kodiak is a DEX that stands out from the Berachain incubation project "Build a Bera." In addition to supporting BEX's Uniswap v2-like features, which distribute liquidity evenly across the entire price range (, Kodiak also offers CLAMM ) concentrated liquidity automated market maker ( functions similar to Uniswap v3, allowing 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 efficiently. 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 utilizes 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 be utilized by other protocols. However, Kodiak standardizes users' CLAMM liquidity positions through the Island feature, allowing this LP coin to 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 its position as a core infrastructure. They also operate their own Berachain nodes as validator nodes, and as of January 3rd, they have received the second highest BGT authorization in the bArtio Testnet.

![Discussion on the characteristics of the Berachain ecosystem and overview of core projects before issuing coins])https://img-cdn.gateio.im/webp-social/moments-617729a1894e30baae6111b9148bc7e1.webp(

) Honeypot Finance

Honeypot Finance is a protocol that supports all aspects of the token lifecycle, from issuing to providing liquidity and facilitating 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, allowing 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 fair token issuance and distribution.

• Pot2Pump: A meme coin issuance platform that provides a safer environment for meme coin issuance and trading, featuring functionalities such as preventing bot sniping and refunding participating users in the event that 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 coin $HPOT as a delegation reward 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 value of the token by purchasing and burning $HPOT using the income from node operations, while 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 similar underlying assets similar to Curve Finance###, 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 tokens, general users who do not operate nodes cannot obtain network rewards.

To solve this problem, liquidity staking protocols distribute rewards by accepting the staking of native tokens and delegating node operations, allowing regular users to participate in network staking. These protocols also issue LP tokens to stakers as proof of how much native token they hold, thereby increasing the liquidity of the ecosystem. Through these features, liquidity staking protocols have also become a core infrastructure of PoS networks.

In contrast, while Berachain's node operations require 69,420 $BERA, its structure allows liquidity providers to receive network rewards calculated in $BGT and liquidity provision interest when they deposit liquidity tokens obtained from the ecological protocol into Berachain. Therefore, apart from the differences in methods and sequence, 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 operating their own nodes as demonstrated by Kodiak and Honeypot Finance to establish a self-sustaining flywheel model to launch their liquidity pools.

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

( Infrared

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

The Infrared-operated vault 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) 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 the node.
• Use in other DeFi protocols
• Sell for profit

Therefore, Infrared concentrates and distributes the rewards generated by the PoL mechanism by converting $BGT into liquid tokens to fewer $iBGT stakers, while also helping 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 liquidate the $BERA required 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 also briefly introduced in the aforementioned DEX field. After the mainnet launch, the Infrared plan to launch Kodiak's Island Pool ( has been operating 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 additional $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 gained the attention of many users, currently accepting the most $BGT delegation in the bArtio Testnet. In addition, many ecological projects have already 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, specific details about 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 its held $BGT will be granted.

( BeraPaw

BeraPaw is also a liquid 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 liquidation 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 from 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, with 1) receiving rewards and 2### voting for the $BGT emission pool. Through this structure, users and protocols using the $PAW token for $BGT Emission voting can exercise more voting power with relatively less capital. Therefore, protocols seeking initial liquidity within the Berachain ecosystem are expected to actively leverage $PAW to generate $BGT rewards for their liquidity pools.

The above are two liquidity staking protocols that are ready to officially launch on Berachain. While these protocols not only allow for more derivative products but also offer users more ways to engage, 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 liquidity staking protocols that provide $BGT liquidation functions are expected to be adopted by many users and protocols, becoming core infrastructure.

![Discussion of Berachain Ecosystem Features and Overview of Core Projects Before Coin Issuance])https://img-cdn.gateio.im/webp-social/moments-bd6766a4939b4f048591e57df2445590.webp)

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 protocols, BEND has two notable features: 1( $HONEY cannot be used as collateral, and deposits of 2) $WBTC and $WETH do not earn interest but will generate $BGT rewards when borrowing $HONEY.

Through this structure, BEND strengthens Berachain's tri-token economic structure, generating basic interest for $HONEY, while increasing borrowing demand through $BGT, enriching the ecosystem's liquidity. Users can also execute $BGT leveraged farming by repeatedly swapping borrowed $HONEY for $WETH, $WBTC, and depositing it into BEND.

Next, we will discuss in detail.