Berachain’s Proof-of-Liquidity (PoL) is a mash-up of:

• Proof-of-Stake for security,

• liquidity mining for depth, and

• Curve-style vote-escrow games for governance.

The chain issues two native assets:

• BGT – governance and incentive-dispatch token.

• BERA – gas & validator collateral.

Actors & Flow

1. Protocols bribe validators with yield to win BGT emissions.

2. Validators stake BERA to produce blocks and receive:
   • base rewards +
   • a variable “Boost” slice (proportional to delegated BGT).

3. Validators funnel the variable slice to whitelisted PoL vaults (via BeraChef), earning kickbacks in stablecoins or protocol tokens.

4. Liquidity Providers in those vaults farm high APYs (DEX fees + protocol token + BGT).

5. BGT stakers delegate to validators, who recycle bribes back to them.

Result: a reflexive loop where deeper liquidity → higher Boost → more BGT → yet deeper liquidity.

BGT did the heavy lifting (governance + emissions), but BERA was stuck in a minor role: pay gas and bond validators. Holders had to:

• wrap BERA,

• supply LP pairs on third-party DEXs, or

• accept CEX staking rates—none of which felt native, simple, or institutional-grade.

Berachain v2 grafts a BERA Incentive Module onto the existing stack without breaking prior incentives.

1. Users stake BERA (or wrapped WBERA) directly on-chain → receive sWBERA (a liquid staking receipt).

2. sWBERA is composable: collateral in lending pools, looped in leverage vaults, etc.

3. Redemption from sWBERA → BERA is time-locked for 7 days—similar to Lido’s withdrawal queue.

• 33 % of all protocol bribes (USDC, HONEY, protocol tokens) are auctioned into WBERA and then re-staked to reward BERA stakers.

• BERA emissions still exist, but they are backstopped by actual protocol spend, not naked inflation.

Back-of-the-napkin:

• If ETH and BERA both emit $100 M of new tokens:
  – ETH simply distributes $100 M to stakers.
  – Berachain sells its emissions rights for ~$80 M in bribes, then recycles the proceeds → $180 M total value flow to stakers.

Hence, 103 % APY for on-chain BERA staking (vs. 60–90 % on CEXs) is real yield, not a mercenary subsidy.

• Real cash-flows → transparent, on-chain revenue source.

• Single-asset staking → fits neatly into exchange or custodial staking products.

• No reliance on third-party DeFi lego → fewer audit attack surfaces.

If the rumored Clarity Act mandates traceable income and segregated custody, BERA staking checks every box. A future Digital Asset Treasury could let corporates park idle cash in an on-chain, yield-bearing instrument without leaving their compliance perimeter.

v2 keeps the old liquidity loop but adds a second gear:

• Protocols still battle for BGT.

• Validators still optimize bribes.

• BERA stakers now sit at the same table, earning protocol-level real yield with a single click.

The upgrade turns BERA from a utility token into a productive institutional-grade asset, accelerates capital inflow, and hard-codes sustainability into Berachain’s core economics.

Berachain’s Proof-of-Liquidity (PoL) is a mash-up of:

• Proof-of-Stake for security,

• liquidity mining for depth, and

• Curve-style vote-escrow games for governance.

The chain issues two native assets:

• BGT – governance and incentive-dispatch token.

• BERA – gas & validator collateral.

Actors & Flow

1. Protocols bribe validators with yield to win BGT emissions.

2. Validators stake BERA to produce blocks and receive:
   • base rewards +
   • a variable “Boost” slice (proportional to delegated BGT).

3. Validators funnel the variable slice to whitelisted PoL vaults (via BeraChef), earning kickbacks in stablecoins or protocol tokens.

4. Liquidity Providers in those vaults farm high APYs (DEX fees + protocol token + BGT).

5. BGT stakers delegate to validators, who recycle bribes back to them.

Result: a reflexive loop where deeper liquidity → higher Boost → more BGT → yet deeper liquidity.

BGT did the heavy lifting (governance + emissions), but BERA was stuck in a minor role: pay gas and bond validators. Holders had to:

• wrap BERA,

• supply LP pairs on third-party DEXs, or

• accept CEX staking rates—none of which felt native, simple, or institutional-grade.

Berachain v2 grafts a BERA Incentive Module onto the existing stack without breaking prior incentives.

1. Users stake BERA (or wrapped WBERA) directly on-chain → receive sWBERA (a liquid staking receipt).

2. sWBERA is composable: collateral in lending pools, looped in leverage vaults, etc.

3. Redemption from sWBERA → BERA is time-locked for 7 days—similar to Lido’s withdrawal queue.

• 33 % of all protocol bribes (USDC, HONEY, protocol tokens) are auctioned into WBERA and then re-staked to reward BERA stakers.

• BERA emissions still exist, but they are backstopped by actual protocol spend, not naked inflation.

Back-of-the-napkin:

• If ETH and BERA both emit $100 M of new tokens:
  – ETH simply distributes $100 M to stakers.
  – Berachain sells its emissions rights for ~$80 M in bribes, then recycles the proceeds → $180 M total value flow to stakers.

Hence, 103 % APY for on-chain BERA staking (vs. 60–90 % on CEXs) is real yield, not a mercenary subsidy.

• Real cash-flows → transparent, on-chain revenue source.

• Single-asset staking → fits neatly into exchange or custodial staking products.

• No reliance on third-party DeFi lego → fewer audit attack surfaces.

If the rumored Clarity Act mandates traceable income and segregated custody, BERA staking checks every box. A future Digital Asset Treasury could let corporates park idle cash in an on-chain, yield-bearing instrument without leaving their compliance perimeter.

v2 keeps the old liquidity loop but adds a second gear:

• Protocols still battle for BGT.

• Validators still optimize bribes.

• BERA stakers now sit at the same table, earning protocol-level real yield with a single click.

The upgrade turns BERA from a utility token into a productive institutional-grade asset, accelerates capital inflow, and hard-codes sustainability into Berachain’s core economics.