Berachain Launches Proof of Liquidity Rewards

In a major milestone for the network, Berachain, a bear-themed layer-1 blockchain, went live with rewards for its proof of liquidity consensus mechanism on Monday. A day after the launch, the BERA token has gained 14%, according to CoinGecko, and broken into the top 100 cryptocurrencies by market capitalization.

Proof of Liquidity

Proof of liquidity is a variation of the proof of stake consensus mechanism used on Ethereum. It utilizes two tokens: BERA for gas and network security and BGT for governance and rewards. Validators stake BERA to propose blocks and earn rewards in BGT, which are then distributed to reward vaults.

Validators supply liquidity to reward vaults, allowing users to stake assets like BERA and earn BGT rewards. In exchange for providing liquidity, validators receive a receipt token that can also be staked in reward vaults, creating aligned incentives for network security through staking. This feature went live Monday, launching 37 reward vaults and beginning BGT distribution across the ecosystem.

Governance and Future Developments

BGT, the governance token, is used for voting on proposals. Later this week, a second batch of reward vault whitelist requests will be voted on. The network claims the first batch selection was based on “economic value, security, and alignment with Berachain’s ecosystem.”

> Proof of Liquidity is live.
> Berachain’s block rewards now work for you, fueling the applications you use and rewarding economic activity.
> The era of earning more starts today.
>
> — Berachain Foundation 🐻⛓ (@berachain) March 24, 2025

Clearly, the market reacted positively to the news as the BERA token climbed 14% on the day and 30% on the week, reaching as high as $8.03 earlier this morning. As of this writing, BERA is trading at $7.89, maintaining its position as the 100th largest cryptocurrency by market cap at $858 million.

“This marks a major step in Berachain’s governance evolution,” wrote pseudonymous Berachain founder Homme Bera in a blog post. “As we are moving from a limited launch within native BEX pools to a more open, application-first ecosystem where projects can now drive sustainable growth through proof of liquidity.”

Berachain launched its mainnet in February, airdropping $1.17 billion worth of BERA tokens to users involved in its pre-launch initiatives. However, this was a fairly limited launch with only its Berachain native decentralized exchange (referred to as BEX) liquidity pools available for asset deposits.

The launch of the first batch of reward vaults is a significant step in what the network brands as the official launch of proof of liquidity.

“This is just the beginning,” Homme Bera said, explaining that a second batch of reward vaults will be reviewed by the week’s end. “With proof of liquidity live and governance scaling, dapps now have a permissionless way to attract liquidity and users, while BGT holders ultimately dictate where incentives flow.”

Edited by Stacy Elliott.