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Aug 31, 20243 min read

Berachain Secures $100M in Series B Round to Advance EVM-Compatible Blockchain Innovation

Updated: Oct 11, 2024

Funding Information

Berachain raised $100 million in a funding round led by BH Digital and Framework Ventures. This significant investment round also saw participation from Hack VC, DAO5, and other notable investors. 


With a valuation of $1.5 billion, Berachain is positioning itself as a specialized Layer-1 blockchain for decentralized finance (DeFi) applications. The funds will be utilized to further develop the platform's unique features, including its Proof-of-Liquidity consensus mechanism and gasless transaction capabilities, which are designed to enhance DeFi protocol efficiency and user experience.



What is Berachain?

Berachain is an EVM-compatible Layer 1 blockchain that leverages a unique Proof-of-Liquidity (PoL) consensus mechanism. It is designed to overcome traditional blockchain limitations by enhancing liquidity, decentralizing stake, and aligning the interests of validators and developers. Built on the BeaconKit framework, Berachain integrates advanced features from the Cosmos SDK to provide a flexible and customizable blockchain solution.



Key Features

High-Performance Capabilities: Berachain is engineered for speed and scalability, catering to the growing demand for efficient blockchain solutions. Its high-performance design ensures that it can handle a large number of transactions with minimal latency.


EVM Compatibility: Berachain supports the Ethereum Virtual Machine (EVM) environment, making it fully compatible with Ethereum's smart contracts, tooling, and operations. This seamless integration allows developers to transition their projects from Ethereum to Berachain with ease.


Proof-of-Liquidity (PoL): At the heart of Berachain’s innovation is the PoL consensus mechanism. Unlike traditional Proof-of-Stake (PoS) systems, PoL focuses on building liquidity to enhance trading efficiency, price stability, and network growth. It aligns the incentives of validators, protocols, and users, contributing to the overall health of the blockchain.



EVM-Compatible vs. EVM-Equivalent

EVM-Compatible: This means a blockchain can interact with Ethereum's ecosystem but does not necessarily replicate the entire EVM environment. EVM-compatible chains can work with Ethereum’s smart contracts and tools to some extent.


EVM-Equivalent: An EVM-equivalent blockchain, such as Berachain, aims to fully replicate Ethereum’s environment. It ensures complete compatibility with Ethereum’s operations and tooling, allowing for a smooth transition for developers and users.


Berachain positions itself as an "EVM-equivalent-plus" blockchain. It supports all Ethereum operations while incorporating additional features that optimize its unique Proof-of-Liquidity model.


Berachain’s Modular Approach

Berachain’s development philosophy centers around modularity, facilitated by the Polaris EVM framework. This approach allows for the separation of the EVM runtime layer, ensuring that the blockchain can evolve without sacrificing performance or security.


Polaris EVM: The Polaris EVM framework enhances Berachain’s compatibility with Ethereum, offering developers an improved environment for smart contract execution. It includes stateful precompiles and custom modules to extend Ethereum’s capabilities.


BeaconKit: BeaconKit, Berachain’s modular framework, integrates benefits from the Cosmos SDK, such as increased composability and single slot finality (SSF). It allows for easy integration of different layers, including custom block builders and rollup layers.


Proof-of-Liquidity (PoL) Explained

High-Level Model Objectives: PoL aims to systematically build liquidity on-chain, address stake centralization, and align the interests of validators and protocols. By incentivizing liquidity provision and decentralizing stake, PoL fosters a more secure and user-centric blockchain environment.


PoL vs. PoS: Traditional Proof-of-Stake systems often lead to stake centralization and reduced liquidity. PoL overcomes these limitations by separating governance and economic incentives into distinct tokens, enhancing liquidity and security.



Token Ecosystem

$BERA Token: The native gas token of the Berachain network, used for transaction fees and staking to activate validator nodes. It forms the base layer of security for the chain.


$BGT Token: The Bera Governance Token is used for governance and economic incentives. It is non-transferable and acquired by providing liquidity, ensuring decentralized governance and incentivization.


$HONEY Stablecoin: $HONEY is a fully collateralized stablecoin pegged to the US Dollar. It aims to provide a stable and reliable means of exchange within the Berachain ecosystem, backed by a diverse range of crypto collateral.


Conclusion

Berachain represents a significant advancement in blockchain technology, combining Ethereum compatibility with innovative consensus mechanisms and a modular development approach. As the blockchain landscape continues to evolve, Berachain stands out as a promising platform for developers, users, and validators, offering a scalable, efficient, and inclusive environment for decentralized applications.


For more information, explore Berachain’s documentation, GitHub repository, and community forums to dive deeper into this groundbreaking platform.


 

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