PoL v2: A New Breakthrough in the Value Closed Loop of Berachain

1. From Liquidity Incentives to Core Breakthroughs in Value Circulation

Traditional public chains have long faced the "mainnet asset dilemma", where the main tokens, while serving Gas and consensus functions, struggle to directly capture the growth of ecological value. Berachain attempts to address this issue through its PoL (Proof of Liquidity) mechanism, and the key iteration in version 2 is the shift of 33% of DApp incentives from BGT stakers to BERA stakers. This seemingly minor adjustment actually represents a paradigm shift in the value model of mainnet assets.

Although PoL v1.0 successfully promoted the growth of ecological TVL, the incentives mainly flowed to BGT and its derivatives. The v2 version established a "dual channel allocation" (67% BGT/33% BERA), allowing main coin holders to obtain protocol layer returns without engaging in complex DeFi strategies for the first time, achieving an upgrade from "Gas token → yield asset."

2. Intricate Mechanism Design

1. Non-inflationary returns: v2 has not increased the token emission, but rather restructured the flow of existing incentives, allowing BERA to obtain on-chain cash flow. Currently, approximately $50K-$120K of incentives are directly injected into the BERA staking pool every week, creating sustained buying pressure.

2. BGT Ecological Niche Protection: Retain 67% of incentives for BGT stakers, maintaining the project party's "1 dollar → 1.x dollars" incentive leverage effect, while avoiding triggering a liquidity squeeze for governance token holders.

3. Triple Positive Feedback Loop:

   • More BERA staking → Higher chain security
   • Higher staking rate → fewer circulating tokens
   • Less circulation → Incentivizes the amplification effect on unit BERA returns

3. Potential Impact on Market Structure

1. Retail Investors: Low Barrier to Profit Capture Regular users only need to stake BERA to obtain two types of income:

   • Direct income: 33% incentive distribution (APY approximately 9-15%)
   • Indirect income: native DEX protocol revenue distribution

2. Developers: New Gameplay of Main Coin Economy The project party can utilize the收益属性 of BERA to design new mechanisms, such as:

   • Automatically convert protocol income to BERA for buyback
   • Develop the BERA-based veToken model
   • Create a derivative agreement secured by BERA

3. Investors: Reconstruction of Valuation Models With BERA gaining chain-level earning capabilities, its valuation logic may transition to "discounted cash flow." Theoretical Market Value = ( Chain Annual Income × Price-Earnings Ratio ) + ( Gas Demand × Inverse of Circulation Speed )

Based on the current weekly $100K incentive, the annualized $5.2M profit corresponds to a 20x PE, implying a valuation of $104M, not accounting for Gas consumption and future income growth.

4. Risks and Challenges

1. Short-term speculation risk: Some BGT stakers may shift to other ecosystems due to incentive dilution.
2. Complexity of the mechanism: Ordinary users still need to understand the interaction between PoL, BGT, and BERA.
3. Regulatory Gray Area: The compliance of incentive mechanisms has yet to be tested.

5. Industry Insights: L1 Competition Enters the Deep Waters of Value Distribution

The exploration of Berachain reveals a trend: the competitive focus of the next generation of public chains is shifting from TPS/low Gas prices to the efficiency of value distribution. While other public chains attempt different methods to distribute profits or support prices, PoL v2 demonstrates a more native solution—directly injecting ecological value into the main coin through protocol layer design.

If this model can be continuously validated, it may lead to imitation by other L1s. In the current environment, "how can the chain create real demand for itself" has become a critical proposition that determines the life and death of a project. Berachain's answer is: let the main coin become the primary beneficiary of ecological prosperity.