Discussion of Berachain Ecosystem 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 testnet "bArtio Testnet" to address the issues discovered in the first testnet.

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 also exceeded 2.38 million. Although it is still in the test 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, pushed for the "Q5 mainnet launch" and recently introduced Boyco through a tweet, suggesting that "Q5 will happen before April", 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, one must 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 barrier to entry 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 excelled 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 smooth liquidity trading within the ecosystem and ensure the effective operation of the PoL mechanism. In light of the existence of BEX, other DEXs 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 the Uniswap v2 style features of BEX with liquidity distributed evenly across the entire price range (, Kodiak also offers a CLAMM ) concentrated liquidity automated market maker feature 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 effectively. In addition, 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 utilizes BEX to rebalance liquidity, thereby 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 by other protocols. However, Kodiak standardizes the 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 validating nodes, and as of January 3, they have received the second highest BGT authorization in the bArtio Testnet.

( Honeypot Finance

Honeypot Finance is a protocol that supports all aspects of the token lifecycle, from issuing to providing liquidity and effective trading, composed 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 within a specific period and execute 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 functions such as preventing bot sniping and refunding participating users if the fundraising goal is not met within 24 hours.

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

In addition, Honeypot Finance utilizes the accumulated $BGT to release to the $HPOT liquidity pool, thereby enhancing the liquidity of $HPOT. The protocol also plans to increase the token value by using node operation income to buy and burn $HPOT, while 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 other protocols advocating for efficient and convenient trading features that are 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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Liquidity Staking

In a typical PoS network, network rewards are distributed to validators who hold a certain number of tokens and operate nodes. Therefore, if the network itself does not have an authorization structure for a native coin, general users who do not operate nodes cannot receive network rewards.

To address this issue, 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 liquidity in the ecosystem. Through these functions, liquidity staking protocols have also become a core infrastructure of PoS networks.

In contrast, although the operation of nodes in Berachain 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, aside 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, as demonstrated by Kodiak and Honeypot Finance, by operating their own nodes to establish a self-sustaining flywheel model to kickstart their liquidity pools.

In this context, Berachain's liquid staking protocol will provide the voting rights to determine 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 vaults can accept LP tokens from the liquidity pools, 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(, which is proportional to the LP tokens they deposited, as well as the liquidated $BGT).

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

• Staking on Infrared to receive rewards generated by nodes.
• Use in other DeFi protocols
• Sell for profit

Therefore, Infrared centralizes and distributes the rewards generated by the PoL mechanism to fewer $iBGT stakers by turning $BGT into a liquid token, while also helping other protocols in the Berachain ecosystem to incorporate $iBGT into their protocols, allowing their platforms to offer higher returns for their users. In addition, Infrared plans to launch new features that will enable them to receive and settle 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 operating on the testnet (, allowing users to use Kodiak's CLAMM for more efficient $iBGT farming, and to re-stake the received $iBGT in Infrared, or deposit it back into Kodiak's $iBGT/$BERA Island Pool for more $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 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 regarding how Infrared will use the delegated $BGT to select the Emission of $BGT have not been disclosed. 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 the $BGT it holds will be provided.

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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 $BGT settlement token.

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 rewards 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. 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 liquidity staking protocols that are ready to officially launch on Berachain. While these protocols not only allow for more derivative products but also provide users with 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 $BGT delegated, and the liquidity staking protocols that provide $BGT liquidation functions are expected to be adopted by many users and protocols, becoming core infrastructure.

Lending

Berachain also has a native lending protocol called BEND, which offers the following features:

• Use $WBTC, $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 accrue interest, but $BGT rewards are generated when borrowing $HONEY.

Through this structure, BEND strengthens the triple token economic structure of Berachain, generating basic interest for $HONEY, while increasing lending demand through $BGT and enriching the liquidity of the ecosystem. Users can also leverage $BGT farming by repeatedly exchanging borrowed $HONEY back to $WETH, $WBTC, and depositing them into BEND.

Next, we will explore in detail several major lending protocols that are set to launch on Berachain and the features offered by each platform.

) BeraBorrow

BeraBorrow is an over-collateralized stablecoin issuance protocol, users