Beraborrow unlocks instant liquidity against Berachain assets through the first PoL powered stablecoin, Nectar ($NECT). The project is designed to maximize opportunities for users without forcing them to sacrifice yield.
Beraborrow provides immediate liquidity for Berachain assets through the innovative use of a Proof of Liquidity (PoL) powered stablecoin, Nectar ($NECT).
This platform prioritizes simplicity and flexibility, enabling users to leverage their assets without sacrificing potential yields.
Users can deposit collateral into what are termed "Dens," which then allow the minting of the over-collateralized stablecoin: $NECT.
This stablecoin is integral to the Berachain decentralized finance (DeFi) ecosystem, enabling further investment opportunities while allowing users to maintain their exposure to the initial collateral assets.
Originally centered on $iBGT, Beraborrow has expanded to support a variety of collateral types including Bera native tokens, liquid staking derivatives, and liquidity provider (LP) positions.
After an intense testing period and a few weeks after the Berachain mainnet launch, Beraborrow launched the $NECT token on February 6th, followed by its dApp on February 26th.
At this point, we can say that the project has reached a certain level of development maturity, with almost all of its functionalities active.
The token options to deposit as collateral are: $BERA, $wBERA, $wBTC, $wETH y $OHM.
However, the project's development team is working on these details, which should be ready in the coming weeks.
According to its documents, Beraborrow leverages the PoL as follows:
Deep liquidity is essential to Beraborrow, as it improves the platform's functionality by reducing slippage during loop strategies.
To achieve this, the platform incorporates mechanisms such as flywheels that leverage Proof of Liquidity (PoL) to increase $NECT liquidity.
This process involves accumulating voting power to allocate more rewards to $NECT liquidity providers (LPs), creating a reinforcing cycle that continuously boosts liquidity.
$NECT integrates PoL in a composable manner, allowing liquidity positions containing $NECT to self-compound, while maintaining exposure and governance capabilities through $BGT.
This composability and the ability to stake $BGT for additional yield enhance $NECT's utility, allowing it to capture and reinvest PoL issuance back into the ecosystem, thus maintaining a productive cycle of capital utilization and governance participation.
The platform uses a bootstrapping strategy known as the $NECT/$iBGT flywheel, which facilitates self-compounding without the need to sell assets.
This strategy views $NECT as a stable, encapsulated, and staked version of $iBGT, using the captured emissions from the $NECT/iBGT LP pool to generate more $NECT.
This newly created $NECT is then paired with $iBGT and redeposited into the LP, thus perpetuating the liquidity and rewards cycle.
Source:
Documents: "How Beraborrow utilises Proof of Liquidity" - LINK
COMPETITIVE ADVANTAGES
SCORE = 5/5
Beraborrow stands out in the Berachain ecosystem for several key reasons that give it significant competitive advantages:
Integration with Berachain's PoL mechanism: By closely aligning with Berachain's core technology, Beraborrow leverages Proof of Liquidity (PoL) to innovate and improve the way overcollateralized stablecoins and the lending and borrowing market are offered. This integration optimizes liquidity and capital efficiency, which is crucial for its users.
Financial product innovation: Beraborrow innovates in the stablecoin and lending market by offering products that allow users to maintain exposure to their assets while accessing liquidity. This represents a significant improvement over traditional approaches, where users often must sacrifice yield or exposure.
POLLEN is a governance token integral to the Beraborrow protocol, designed to bolster its stability and expansion by promoting the adoption and liquidity of NECT.
Holders of POLLEN engage in decision-making and implement governance-driven incentives that support the growth of the Beraborrow ecosystem.
Initial incentives are aimed at enhancing the Liquid Stability Pool and the liquidity of the stablecoin, with plans to shift focus towards increasing the utility of NECT in various applications once a solid liquidity base is established.
Revenue from protocol interest, unique in that Beraborrow does not involve lenders, is directed towards governance initiatives that fortify ecosystem sustainability.
These initiatives include Berachain Rewards Vaults, where POLLEN holders can stake their tokens to partake in governance and align with the protocol's long-term goals, and Protocol Liquidity Initiatives, which aim to boost the stability of NECT as a decentralized stable asset.
The strategic use of POLLEN creates a self-reinforcing cycle: enhanced NECT utility attracts more users, which in turn increases the protocol’s interest rates and fees. These are funneled back into the sPOLLEN Berachain reward vault, increasing the value distributed to further incentivize liquidity, thus perpetuating the cycle.
The POLLEN token is closely tied to Berachain's Proof-of-Liquidity (PoL) consensus mechanism, serving as a fundamental element for governance and incentive alignment within the Beraborrow protocol:
Growing Adoption and Participation in Governance: As Beraborrow's adoption increases, so does the relevance of POLLEN. The token is used to facilitate and incentivize active participation in governance decisions.
Revenue Distribution and Incentives: Interest rate revenues generated by the protocol are channeled into governance-driven incentives through the deposit of sPOLLEN rewards (staking POLLEN).
Staking and Governance Incentives: By staking POLLEN, users can participate in Beraborrow's governance, with rewards tied to these activities.
Fee Allocation and Long-Term Commitment: When vePOLLEN holders make governance decisions, 60% of the protocol's fees are allocated to governance initiatives.
Treasury Control: vePOLLEN holders have significant control over the VE treasury, which accumulates assets such as BGT and swaps assets such as iBGT to POLLEN.
Enhanced Governance Function: As more participants engage with the protocol and its activities, POLLEN's governance function is strengthened, resulting in a more robust and effective PoL system.
The project has a strong presence on social media, both on X and Discord.
Particularly on Discord, the frequency of announcements on the main channels is infrequent, but the team's presence in the general channels and their support for their community are constant.
X's posts often receive more than 10,000 views, especially when they relate to project-related releases, such as the migration of their NFT Big Fat Bera to Berachain, the launch of their vaults, or the announcement of the $POLLEN TGE.
The X account was created in January 2024 and, at the time of writing, has 50.5,000 followers.
The Discord server has 31869 members. More than 400 of them are core members of the community.
COMMUNITY GROWTH
SCORE = 5/5
Beraborrow's social media presence and engagement rate have increased on both Twitter and Discord.
S&P conducted a preliminary report in October 2024 (which was not published), and at that time, the X account had 43.72k members and today it has , representing an increase of 15.21 %.
At the same time, the Dc server had 27.68k members and currently has 31869, representing an increase of 15.13 %.
This increase is due to the project's interaction with THJ's CubQuests, the dApp's testnet period on bArtio, and, more recently, its launch on the Berachain mainnet.
ENGAGEMENT LEVELS
SCORE = 5/5
Engagement through X and Discord has peaks of high activity and is not constant or frequent.
The best engagement levels are achieved at X, where views, likes and re-posts are more in line with the number of followers.
On Discord, the situation is different. For example, in response to the same TGE announcement (]in the same period of time), only 69 people responded to the official announcement out of a total of over 30k members.
Beyond this detail, the quality of the information on both platforms and the way it is communicated are excellent and beyond dispute.
Discord Mods seem pretty responsive and vivid, whether when it comes to confirming quest participation, answering to questions regarding the protocol and/or the product, often engaging with the members.
Regarding the activities carried out to maintain participation in the project, we can mention: social media missions in collaboration with Cub Quests; testnet-related tasks to obtain specific roles on Discord; community games and events (Let's Draw, Rumble, monthly events, community calls, Beraborrow poker nights, etc.).
Regarding engagement on Discord, the team has informed us that the same company that audited Berachain's Discord server recently conducted a Discord audit.
Due to this audit, they were unable to send notifications properly and are working to resolve this issue.
Engagement was much higher before the audit and when Discord pings were working properly, as shown in this image:
TRANSPARENCY
SCORE = 5/5
According to our analysis, it seems that Beraborrow uses X as an acquisition tool, and Discord as a retention/community consolidation tool.
We perceive that the project is transparent in communicating information, or at least it is committed to doing so, whether through discord announcements, discord moderators pings, or posts on X.
It's clear that there has been a recent emphasis on the project's image.
Videos and tutorials have also been created to explain how to use the platform in a way that's accessible to all audiences.
Its documents are extremely comprehensive.
All project information, including smart contract audits and contingency plans, as well as the dynamics of the PoL and the development of its tokens ($NECT & $POLLEN), can be found in.
Beraborrow has undergone two audits with Halborn, two audits and an audit competition with Sherlock, an audit and an audit competition with Cantina and rigorous invariant testing with Recon.
These audits were performed on all of the project's smart contracts between October 2024 and February 2025.
In each of the reports, the auditors found errors or issues of varying risk levels. Beraborrow addressed all of them and resolved virtually all of them.
An example is Halborn's report, which states that all the issues found were addressed, taken into account, and/or resolved by the project.
Unlike banks or centralized exchanges, CDP protocols like Beraborrow, MakerDAO, and Liquity don’t custody user funds or perform traditional financial intermediation.
Users interact directly with autonomous smart contracts on the blockchain.
There’s no third party facilitating loans, managing accounts, or approving transactions.
The system simply enforces pre-defined rules written in immutable code.
Because there’s no centralized party providing a financial service, there’s no legal "entity" to compel to collect KYC. These protocols are not intermediaries—they are tools. Software, not services.
Beraborrow’s native stablecoin, $NECT, is not backed by fiat like $USDT or $USDC. Instead, it's collateralized by overcollateralized crypto assets, similar to $DAI (from MakerDAO) and $LUSD (from Liquity).
Because of this, $NECT does not meet the regulatory definition of a traditional "stablecoin," which typically refers to assets pegged to fiat and backed by centralized reserves. Instead, $NECT is trust-less, algorithmic, and fully on-chain.
RISK IDENTIFICATION
SCORE = 5/5
Beraborrow has many strengths: the innovative use of PoL, the auto-compounding mechanism, and their native $NECT stablecoin.
But it faces potential weaknesses in terms of liquidation risk, system complexity, governance centralization, peg stability, and market competition.
However, it has potential weaknesses in terms of liquidation risk, system complexity, governance centralization, peg stability, and market competition.
Projecting, preventing, and determining how these weaknesses will be addressed by defining the actions to be considered will be crucial to the protocol's long-term sustainability and project success.
In this regard, one of its strengths is the six audits it has undergone, a bug bounty program, a competition with Sherlock, and its collaboration with Hypernative, a company responsible for continuously monitoring on-chain activity for malicious contracts and the ability to pause contracts if anything is at risk.
In turn, their documents clearly explain the mechanisms for maintaining NECT's peg, as well as detailing technical measures to address these potential risks.
Sources:
Documents - "Collateral Screening and Parameter Methodology" - LINK
The project indeed has well-defined and structured contingency plans in place to handle various adverse situations that might arise.
These plans are essential for ensuring stability and confidence in the system, especially in a DeFi environment that can be highly volatile and risky.
Here are some key features indicating the presence of robust contingency plans:
Collateral Evaluation Methodology: Beraborrow has established a rigorous process for assessing and approving collateral assets, including pre-screening and quantitative modeling to determine minimum and critical collateralization ratios, and borrowing limits based on stress scenarios. This helps prevent issues related to liquidity and system stability.
Quantitative Modeling and Stress Scenarios: The use of quantitative modeling to calculate collateralization ratios and conducting stress tests under various adverse market scenarios provides a solid foundation for managing external shocks. This approach helps anticipate and mitigate potential losses, ensuring that the system can withstand even extreme market events.
System-Level Risk Management: Implementing borrowing caps, calibrating interest rates, and ensuring the resilience of the stability pool are all measures that contribute to systemic risk management, protecting the overall health of the system and its users.
Recovery Mode: Establishing a "recovery mode" that activates when the global collateralization ratio falls below a critical threshold shows advanced planning for crisis situations. This mode restricts certain activities that could worsen the situation and encourages actions that stabilize and strengthen the collateralization ratio, ensuring recovery and long-term sustainability of the system.
Impact on Liquidations and Fees During Recovery Mode: Adjustments in liquidation policies and reductions in fees during recovery mode are designed to manage and mitigate the effects of a crisis, providing incentives for behavior that supports system recovery.
These elements suggest that Beraborrow has not only implemented contingency plans but has integrated these plans within its operational and strategic structure, indicative of proactive and risk-aware management of the dynamics in the cryptocurrency and DeFi markets..
SECTION 4 - FINAL SCORE: 20/20
SECTION 5: CREDIBILITY, LEGITIMACY & QUALITY
PROJECT AND TEAM BACKGROUND
SCORE = 4/5
The core team is made up of three members: PrinceBera, Kobble & Bo.
Analyzing their X profiles, we can see that all three have more than 30k followers and that practically 100% of their posts are about Beraborrow.
On the one hand, this does not allow us to see if they have previous experience in other web3 or web2 projects, but on the other hand, it shows us that the core team is completely dedicated to the development of Beraborrow.
Obviously, the core team and the project have credibility in the web3 ecosystem, given that they have received early-stage funding from VCs such as: BlackDragon, Dewhales Capital & Pragma Ventures (South Korea).
Other investors we can also mention: Borderless Capital, CMS Holdings, Primal Capital, SNZ Capital, Temple Dao, Aquanow, Sidedoor Ventures
We can see that the project has been in development in the ecosystem for some time. It has gone through the testnet phase and has already been launched on the mainnet.
Its X account was created in January 2024, and the first message in the Discord announcement channel dates back to April of the same year.
In this time, the project has reached several milestones:
The preparation and publication of its documentation,
the development and growth of its community,
the creation of numerous partnerships,
the securing of venture capital funding,
the review of their smart contracts through numerous audits,
the successful launch of its "Big Fat Beras" NFT collection,
Beraborrow is one of the fastest growing and most reputable projects in the Berachain ecosystem.
Since its beginnings, they have begun to grow their community and to create collaborations and partnerships.
Analyzing their social networks, we can see their connection with other projects such as THJ, D2 Finance, Yeet, Gummi, Concrete Protocol, Goldilocks, Dirac Finance, Infrared, Burrbear, Kodiakfi, Liquity Protocol, Redstone, among others.
PARTNERSHIPS AND COLLABORATIONS
SCORE = 5/5
According to the documents and at the time of making this assessment, Beraborrow has established partnerships with a few Berachain ecosystem projects:
BurrBear: NECT used as a quote asset on their dApp. Multiple NECT Pools live : NECT-USDC.e-HONEY | NECT-wgBERA | NECT-PLUG.
Smilee Finance: NECT-wgBERA pool. (Live on BurrBear).
Kodiak: NECT-WBERA Sweetened Island live.
YEET: NECT-YEET LP live.
Beradrome: Two farms live: NECT-wgBERA | NECT-USDC-HONEY
Liquity: exclusive licence from Liquity AG required to deploy the friendly fork of LiquityProtocol V2 on berachain under the Beraborrow brand.
Dirac Finance: Allowing the community to earn yield on two key Proof of Liquidity assets: $IBGT and $NECT.
Overall, solid partnerships with established projects within the Berachain ecosystem. Provides a lot of credibility to the BeraBorrow projects and solidifies its place in the larger ecosystem.
Medium: "The Evolution of Beraborrow: From Liquity V1 to V2" - LINK
SECTION 5 - FINAL SCORE: 19/20
RATING RESULTS
The project presents a solid value proposition, excellent integration with Berachain, well-structured tokenomics, high social media activity and engagement, and robust security measures.
This report has been prepared with information provided by the S&P team of Contributors:
While S&P doesn't guarantee absolute protection against scams and rug pulls, it is a valuable tool for navigating the Berachain ecosystem with enhanced security.
Collect this post as an NFT.
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