Discussion of 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, which aligns 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 2nd, according to the Berachain official website, a total of 234 protocols have participated 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 stage, these figures indicate a high level of market interest in Berachain and its ecosystem.

Starting from the end of 2024, Berachain founder Smokey The Bera has pushed the "Q5 launch of the mainnet" and recently introduced Boyco through a tweet, implying that "Q5 will happen before April," 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 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 reduce the barriers to user participation. We will discuss projects that have excelled in various fields 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 that are preparing to launch on Berachain are also preparing various more convenient and efficient services and strategies to effectively compete with BEX 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 features, which average liquidity ( 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 in a narrow range through the CLAMM pool to farm $BGT more efficiently. Additionally, Kodiak also offers an Island feature, which helps 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 customizable nature of liquidity ranges, 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 the LP tokens to be used in other protocols, thus promoting more flexible and diverse ecosystem 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.

( Honeypot Finance

Honeypot Finance is a protocol that supports all aspects of the token lifecycle, from issue coin 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 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 functionalities such as preventing bot sniping and refunding participating users in case the fundraising target is not met within 24 hours.

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

In addition, Honeypot Finance utilizes the accumulated $BGT to release into the $HPOT liquidity pool, thereby enhancing the liquidity of $HPOT. The protocol also plans to increase the value of the token by using income from node operations to buy and burn $HPOT, while retaining the value of rewards 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 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.

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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 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 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 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 differences in methods and sequences, Berachain essentially incorporates liquidity staking into the network protocol.

However, in Berachain, existing protocols can only provide rewards and obtain voting rights by collaborating with validators, or, as demonstrated by Kodiak and Honeypot Finance, by establishing self-sustaining flywheel models to launch their liquidity pools by operating their own nodes.

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 structures that closely integrate 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 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( of $BGT) that has been liquidated 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.

• Used in other DeFi protocols

• Sell profit

Therefore, Infrared concentrates the rewards generated by the PoL mechanism and distributes them to fewer $iBGT stakers by converting $BGT into a liquid token, while also assisting other protocols in the Berachain ecosystem to incorporate $iBGT into their protocols, allowing their platforms to provide higher yields for their users. In addition, Infrared also plans to launch new features that will allow them to receive and liquidate the $BERA needed 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 have 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 re-staked in Infrared or re-deposited into Kodiak's $iBGT/$BERA Island Pool for further $iBGT farming. Of course, users can also choose other gameplay within the ecosystem.

Based on the interconnectivity of this 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 derivatives, 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 delegated $BGT to select the $BGT 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.

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) 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 $BGT settlement token.

The governance token of BeraPaw is $PAW, and users can vote on which liquidity pools should receive $BGT using the $BGT they hold from 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. 1( receives rewards and 2) votes for the $BGT emission pool. Through this structure, users and protocols voting for $BGT Emission with $PAW tokens can exercise more voting power with relatively little capital. Therefore, protocols seeking initial liquidity within 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 offer more derivative products but also provide users with more gameplay options, they also make the ecosystem more complex. On 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 functionality 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, which provides 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 borrowing $HONEY will earn $BGT rewards.

Through this structure, BEND strengthens Berachain's tri-token economic structure, generating basic interest for $HONEY while increasing lending demand with $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 it into BEND.

Next, we will discuss in detail the preparation to be in Be