Bera

Berachain: A Simple Guide to Fun and Friendly Blockchain Experiences

February 13, 2024 written by 01NODE

Berachain started as a fun NFT project in the DeFi world. They created the NFT Rebase, gained a big community, noticed issues in how liquidity and security were aligned at the protocol level, got funding from top VC firms, and eventually launched their own chain.

What is Berachain?

Berachain is a high-performance modular blockchain built on Proof-of-Liquidity consensus. Proof-of-Liquidity is a novel consensus mechanism that aims to align network incentives, creating strong synergy between Berachain validators and the ecosystem of projects. Berachain’s technology is built on Polaris, a high-performance blockchain framework for building EVM-compatible chains on top of the CometBFT consensus engine.

Berachain’s governance adopts the same on-chain proposals and voting as the Cosmos SDK governance module.

Key Terms and Concepts

What are EVM-Compatible Chains?

An EVM-compatible blockchain is designed to support some level of interoperability with Ethereum’s smart contracts and tools, but it does not necessarily replicate the entire EVM environment.

The chain provides a degree of compatibility, making it easier to port applications and assets.

EVM-compatible chains might support Ethereum’s smart contract languages and tools to a certain extent, but there could be differences in functionality, performance, or security features.

Examples – Forked EVM Layer-1 (L1) Blockchains, Some L2 Blockchains

Berachain EVM

Berachain is an EVM-compatible L1 blockchain built on top of the Cosmos-SDK that supports all the same tooling, operations, and adds additional functionality built into the chain that optimizes for proof-of-liquidity and typical abstracted use-cases (DEXs, Oracles, etc).

What is Proof-of-Liquidity?

The proof-of-liquidity is an economic model that aims to address the critical challenges faced by decentralized networks. Proof of Liquidity (PoL) builds on top of the concept of Proof of Stake to address downsides.

The model focuses on three high-level objectives:

  1. Systemically build Liquidity
  2. Solve stake centralization
  3. Align protocols and validators

It addresses these issues by:

  1. Providing liquidity to the BEX liquidity pools, users earn BGT, the Bera Governance Token used for delegating in Proof of Liquidity
  2. Users delegate their BGT to validator(s)
  3. Validators produce blocks based on their proportional weight of BGT delegated to them. Delegators & Validators in turn receive rewards from the chain
  4. Validators vote on future BGT inflation across any number of liquidity pools
  5. Bribes are distributed from validators to their delegators (if the validator has created them

What is Polaris EVM?

Berachain’s EVM-compatibility comes from the Berachain Polaris EVM library. Polaris Ethereum offers an improved EVM experience that goes beyond the basic implementation of Ethereum. In addition to the reliable and consistent Ethereum functionality, Polaris Ethereum offers developers the creation of stateful precompiles & custom modules that developers can use to create more efficient and powerful smart contracts.

What is CometBFT?

CometBFT is a software that facilitates the secure and consistent replication of applications across multiple machines. Security is achieved as long as less than one-third of the machines fail in any arbitrary way, and consistency is maintained by ensuring that all non-faulty machines have access to the same transaction log and compute the same state. This kind of secure and consistent replication is a significant issue in distributed systems, as it plays a critical role in the fault tolerance of a variety of applications ranging from currencies to infrastructure orchestration. The concept of Byzantine fault tolerance (BFT) allows for the ability to handle machine failures in arbitrary ways, even if the machine becomes malicious.

Bribes

Bribes are a means for a validator to incentivize users to delegate BGT to them instead of other validators. A bribe is given out each time a new block has been proposed by the validator chosen for the bribe. It should be noted that like bribes in real life, there is no guarantee that the entity being bribed will fulfill the expected bribe outcome.

Emissions

Whenever a validator is rewarded, they are responsible to share those rewards through a form of emissions where their awarded BGT is distributed through a precompiled contract called Berachef, which shares a certain percentage of the awards to specific whitelisted liquidity pools.

How to Connect a Wallet With Berachain

Currently, any EVM-based wallet that allows RPC importing can be configured to work with Berachain. Compatible Wallets: Metamask, Coinbase wallet, Brave wallet, Frame.

Wallets can connect to various blockchains, with MetaMask setting Ethereum as its default blockchain. In order to connect to Berachain, we’ll need to add the network to MetaMask and select it.

Add Berachain Network Manually

  • To add the network manually, click the drop-down in the top-left of MetaMask (Desktop mode), at the top-middle (Mobile).
  • When the modal appears, click Add network button.
  • At the bottom of the existing list, click Add network manually or Custom networks.
  • Enter the following details into MetaMask to configure the network and connect to Berachain Testnet.

Network: Berachain Artio
RPC URL: https://artio.rpc.berachain.com/
Chain ID: 80085
Currency symbol: BERA
Block explorer URL: https://artio.beratrail.io/

  • Once the data is entered correctly, click Save.
  • After saving the network configuration, you should be connected to the Berachain Testnet!

Berachain Tokens

Bera Tokens

Bera is the network token used to send transactions on the blockchain, which is why it’s sometimes called the “gas token.” It’s what pays for the transaction’s gas.

Bera Governance Token (BGT)

BGT is a governance token that is used to secure the network through staking with validators. The economic value of all the tokens staked in the network adds up to form the security of the chain. Oftentimes, this is the main network token.

BGT is non-transferrable and can only be acquired by depositing liquidity in the native BEX.

BGT, when delegated to a validator, can be used to create and vote on governance proposals such as proposals that decide on which LP pools receive BGT emissions. Once delegated, you will start earning various rewards from the network.

BGT can also be burned 1:1 for BERA. This is a one-way function; BERA cannot be converted into BGT.

How to Get BGT

BGT can be accumulated by performing certain actions in authorized dApps. Some examples include:

  • Depositing liquidity in the native BEX for an LP pair that is earning BGT emissions
  • Borrowing HONEY on Bend
  • Providing HONEY in the bHONEY vault for Berps

Honey Stablecoin

Honey is the Berachain stable coin, pegged to the real dollar value of fiat currency. Honey aims to approximate 1 USDC. Honey can be minted through the HONEY dApp or purchased on the BEX.

Berachain Core Principles

  • Defragmenting LiquiditySimple DeFi

legos (AMM, Perps, Lend) and pools built into the chain and powered by validators.

  • Turbocharging ApplicationsValidators direct network emissions towards decentralized dApps building on Berachain.
  • Highly AccessibleInteroperable and modular VM built at the intersection of EVM and the Cosmos Ecosystem.

Berachain Native Exchange - BEX

Berachain’s Native BEX is the place to get new tokens and provide liquidity. Let’s walk through how to use it. BEX Website

Website Features

The Native BEX allows you to:

  • Buy and sell tokens (swap)
  • Provide liquidity to the BEX
  • Earn BGT rewards for providing liquidity
  • Review various metrics around the performance of different tokens & liquidity pools

Conclusion

Berachain stands out as a dynamic and accessible blockchain ecosystem, emphasizing proof-of-liquidity to address challenges in decentralized networks. Its EVM-compatible architecture, powered by Polaris and secured by CometBFT, offers a user-friendly experience while promoting interoperability with Ethereum. With a strong focus on governance, tokenomics, and an intuitive native exchange (BEX), Berachain aims to simplify DeFi participation, defragment liquidity, and turbocharge decentralized applications, showcasing its commitment to making blockchain technology approachable for a wider audience.

We breathe, we give! #WePlant