Discussion on the Characteristics of Berachain Ecosystem and Overview of Core Projects Before Issuing Coins

Introduction

Berachain is a Layer 1 network characterized by the PoL( Proof of Liquidity) consensus mechanism, currently undergoing its second testnet "bArtio Testnet". As of January 2nd, 234 protocols have participated in the testing, with a total wallet count exceeding 2.38 million. Founder Smokey The Bera has recently hinted that the mainnet will launch before April, attracting both new and existing users to join the ecosystem.

This article aims to explore various fields of the Berachain ecosystem, lower the threshold for user participation, discuss outstanding projects in each field, and detail how each protocol utilizes the PoL mechanism.

DEX

Berachain has a native DEX called BEX, which will be launched on the mainnet as BeraSwap. Other DEXs are preparing various convenient and efficient services and strategies to compete with BEX.

Kodiak

Kodiak is the DEX that emerged from the Berachain incubated project "Build a Bera". In addition to supporting the Uniswap v2 features of BEX, it also offers CLAMM functionality similar to Uniswap v3, allowing for concentrated liquidity within a specific range.

Kodiak provides the Island feature to help automatically reset and balance the CLAMM range. This feature utilizes BEX to rebalance liquidity and establish complementary relationships. Kodiak also standardizes CLAMM liquidity positions through the Island feature, allowing LP tokens to be used in other protocols.

Kodiak has partnered with multiple projects in the ecosystem to establish a core infrastructure position. It also operates validation nodes, and as of January 3rd, has received the second highest BGT authorization in the bArtio Testnet.

Honeypot Finance

Honeypot Finance supports all aspects of the token lifecycle, composed of the following sub-protocols:

• Henlo DEX: A DEX that protects users from MEV attacks, offering limit orders and Batch-A2MM functions.

• Dreampad: A Launchpad protocol that provides incubation and financing opportunities for projects preparing to launch on Berachain.

• Pot2Pump: A platform that provides a safer environment for meme coin issuance and trading.

Honeypot Finance plans to operate validator nodes after the mainnet, providing HPOT rewards to users who delegate BGT. It releases accumulated BGT to the HPOT liquidity pool and plans to enhance the token value by purchasing and burning HPOT with node income.

Liquidity Staking

Berachain has built liquidity staking into its network protocol. Existing protocols can only provide rewards and gain voting rights by collaborating with validators, or by operating nodes themselves to establish a self-sustaining flywheel model.

The liquidity staking protocol will provide the redemption function for BGT, making it easier for ecological projects to adopt a structure that closely integrates the PoL mechanism.

Infrared

Infrared is a liquidity staking protocol co-incubated with Kodiak. It operates a vault that accepts LP tokens, generates BGT interest rates, and runs nodes. After users deposit LP tokens, they can receive iBGT( liquidated BGT).

Users can utilize iBGT in the following ways:

• Receive node rewards by staking in Infrared
• Use in other DeFi protocols
• Sell for profit

Infrared transforms BGT into a liquid token, concentrating and distributing rewards generated by the PoL mechanism to iBGT stakers, while also assisting other protocols in incorporating iBGT. It also plans to launch new features that receive and settle BERA while operating nodes and distributing profits.

Infrared has gained the attention of many users and is currently receiving the most BGT delegation in the bArtio Testnet. Many ecological projects have collaborated with it and plan to launch derivative products, indicating that it will become the most important infrastructure after the mainnet.

BeraPaw

BeraPaw is a liquidity staking protocol that operates a treasury between different nodes and liquidity pools, issuing LBGT as the BGT settlement token.

BeraPaw uses three native coins:

• oBERO: Rewards for users who deposit liquidity coins
• BERO: Main coin, value guaranteed to be above 1 HONEY
• hiBERO: governance coin, can use BGT to vote on liquidity pool rewards

BeraPaw encourages the internalization of rewards within the protocol through this structure, maintains the prices of BERO and hiBERO, and provides lending opportunities for hiBERO holders.

Lending

Berachain has a native lending protocol BEND, which provides the following functions:

• Use WBTC and WETH as collateral to borrow HONEY
• Deposit HONEY

The characteristics of BEND are that HONEY cannot be used as collateral, deposits of WBTC and WETH do not generate interest, but borrowing HONEY will yield BGT rewards.

BeraBorrow

BeraBorrow is an over-collateralized stablecoin issuance protocol that allows users to mint NECT stablecoins. It accepts BERA, HONEY, LP tokens, and iBGT as collateral assets.

BeraBorrow has a governance token POLLEN in addition to NECT, used for:

• Reward for obtaining BGT Emission liquidity pool
• Encourage depositing collateral into the liquidity pool for high NECT debt.
• Reward liquidity stable pool depositors

The LP tokens of BeraBorrow will automatically be deposited into Infrared to generate iBGT rewards. Users can borrow NECT to provide liquidity and then reinvest the LP tokens to establish leveraged positions.

Gummi

Gummi is a lending protocol that operates without the need for oracles, allowing anyone to create lending pools without restrictions. It plans to use any assets from Berachain to provide 100x leverage positions.

Gummi has collaborated with core infrastructure partners like Infrared and Kodiak, planning to support the LP token leveraged farming features of iBGT and Kodiak.

Derivative Protocol

Berachain will launch the native Perp DEX Berps, where users can establish 100x leveraged positions using HONEY, or provide liquidity to earn trading fees, funding fees, and BGT.

SMILEE

SMILEE is an options protocol that creates hedged positions for DEX liquidity positions. SMILEE options generate more profit during periods of high price volatility, in contrast to IL.

SMILEE offers three types of options positions:

• Bull: Bet on a significant price increase
• Bear: Bet on a significant price drop
• Smile: Betting price significantly fluctuates

Exponents

Exponents implements non-liquidatable leveraged positions through its self-developed IBC( reverse Bonding Curve). IBC uses a reverse Bonding Curve, where prices decrease as demand increases.

Exponents uses the IBC mechanism to implement long and short positions for all assets without the need for an oracle. It also provides staking and profit distribution functions, allowing BGT Emission to be distributed as rewards to users.

Other Projects

Goldilocks

Goldilocks is a DAO and platform developing a dedicated DeFi infrastructure for Berachain, including:

• Goldiswap: DEX that includes FSL pool and PSL pool
• Goldilend: NFT collateral lending protocol
• Goldivaults: A protocol that generates interest by locking assets for a specified period.

Yeet

Yeet is an on-chain betting game protocol where users can bet BERA to participate in the game. It also offers the YeetBond feature, allowing users to claim bonds for specific tokens at a discounted price.

Ramen

Ramen is a Launchpad protocol that helps new projects promote and raise funds. It supports both fixed price and price discovery models, and plans to launch the Airdrop Recipes feature.

PuffPaw

PuffPaw is a Vape 2 Earn project where users can earn VAPE tokens through vaping. It also offers a device rental program, allowing non-smokers to participate.

Community

The Honey JAR

The Honey JAR is the most influential core community in the Berachain ecosystem, developed through the Honeycomb NFT series. It has participated in or collaborated with 89 projects, solidifying its position.

The nodes operating in Honey JAR rank third in BGT representation obtained in the bArtio Testnet, showing that a community-centered approach to gaining PoL mechanism advantages is an effective strategy.

Conclusion

The infrastructure protocol of the Berachain ecosystem combines various functions to create complex financial services, attracting user interest and liquidity through the PoL mechanism and unique community culture.

Berachain recently announced the Boyco, RFA, and RFC plans to support the issuance of the BERA token and initial ecological liquidity, indicating that the mainnet is about to be launched. As of January 31, the total accumulated deposits in the related treasury have reached $2.35 billion.

Although it is impossible to determine whether this structure can perfectly guarantee long-term sustainability, the ecosystem and community cases built by Berachain before the mainnet launch are relatively rare in the industry and will serve as an important reference for future projects.