Thread by @bizyugo

You've heard of PoWork, PoStake, delegated PoS, PoHistory.

Now, take a look at this new innovative L1 that uses 'Proof-of-Liquidity' 👀
'Next Generation of Liquidity'

Here's an overview of @berachain 🧵🐻⛓️ (0/12)

1/ @berachain is an upcoming EVM-compatible L1 #buidl using @cosmos SDK, utilizing @Tendermint_Core and Proof-of-Liquidity consensus mechanism.

2/ First off, what is Proof-of-Liquidity?

It's a consensus mechanism that rewards LPs for supplying liquidity to the protocol, similar to dPoS.

Validator votes and block rewards on @berachain are based on the amount of deposited whitelist assets.

3/ @Tendermint_Core + @berachain's Proof-of-Liquidity = Fast transaction speed 🚀 and low transaction costs 💸

It also creates an interoperability layer that helps to increase efficiency and reduce the risk of Sybil attacks.

4/ You can deposit whitelisted assets into validator vaults to secure the chain and receive protocol fees and $BERA in return.

The more you deposit, the more rewards you can potentially earn 💸💰

5/ This is how proof-of-liquidity distribute the rewards:

L1 assets - 80%; $BERA gets 33% of 80%
Stables - 15%
DeFi tokens - 5%

6/ Those staked assets will be utilized to provide liquidity on @berachain's native virtualized AMM (vAMM) built by @CrocSwap.

Your assets will pair with $HONEY (stablecoin) and can be used as collateral to swap, borrow or lend in the native AMM without unstaking your assets.

7/ You may suffer IL because Proof-of-Liquidity Sybil resistance mechanics.

i.e., At the start, you deposited 10 tokens A. In the end, you might only be able to withdraw 9 tokens A.

In exchange, you will earn protocol fees and block rewards in the form of $BERA.

8/ Tokenomics

@berachain uses Tri-Token System

$BERA - native gas token
$BGT - governance token
$HONEY - native collateralized stablecoin

The tri-token system assigns a unique role to each token to encourage long-term use and maintain consistent liquidity on the chain.

9/ $BERA

$BERA is minted at a 10% inflation rate, which means that the supply of $BERA increases over time.

By staking $BERA, you could earn $BERA and $BGT.

10/ $BGT

The non-transferable governance token which can only be obtained by staking $BERA; to ensure long-term chain-user alignment.

The majority of fees generated by the protocol are paid out to $BGT holders in form of $HONEY.

11/ $HONEY

$HONEY is the money; It will be overcollaterized by at least 150% but it depends on the peg.

$HONEY acts as funding rates on perps and base currency for all DEX trades within the ecosystem.

12/ How $HONEY maintains its peg?

- can be minted against staked assets as collateral
- $HONEY Algorithmic Market Operation (AMO) allows you to adjust slippage and fees
- $HONEY used to pay funding rates on perps so it will have a constant demand

13/ Exciting news from the Bera team! They've just announced that they've raised an incredible $42.0M from top investors, with @polychaincap leading the charge.

This is a huge achievement for a project that focuses on community culture. 🐻 ⛓️

https://twitter.com/berachain/status/1649050293080915968

That'll be all for the short overview of @berachain.

In the next thread, I'll talk about their ecosystem and their upcoming projects! Stay tuned for that.

Disclaimer: I invested in Berachain, as you can see from my name 🐻⛓️

Tagging some gigabrains just because:
@rektdiomedes
@TheDeFinvestor
@Dynamo_Patrick
@DefiIgnas
@burstingbagel
@0xTindorr
@Chinchillah_
@DeFi_Cheetah
@DeFi_educator
@alpha_pls
@0xShual
@ViktorDefi
@crypto_condom
@DigitsCapital

Thank you for reading. This is just a primer, so follow up with your due diligence.

Anyway, follow me @bizyugo for more protocol threads.

Show some love by leaving a Like & Retweet the first tweet!

https://twitter.com/bizyugo/status/1653625452437864449