PoL v2: Berachain's Value Breakthrough and New Paradigm of Public Chain Competition

1. Core Breakthrough of PoL v2: Building a Closed Loop of Mainnet Asset Value

For a long time, traditional public chains have faced the "mainnet asset dilemma". Although tokens like ETH and SOL perform Gas and consensus functions, they struggle to directly capture the growth of ecological value. Berachain attempts to address this issue through its PoL (Proof of Liquidity) mechanism, with the key improvement in the v2 version being the shift of 33% of DApp incentives from BGT stakers to BERA stakers. This seemingly minor adjustment actually represents a significant shift in the value model of mainnet assets.

PoL v1.0 has successfully driven the growth of ecosystem TVL, but the incentives mainly flow to BGT and its derivatives. The v2 version introduces the "dual channel allocation" mechanism (67% BGT / 33% BERA), allowing main coin holders to earn protocol-level income without participating in complex DeFi strategies for the first time, achieving an upgrade from "Gas token" to "yield asset."

2. Exquisite Mechanism Design

1. Non-inflationary returns: v2 has not increased the issuance of tokens, but rather redistributed existing incentives to create chain-level cash flow for BERA. According to data platforms, approximately $50,000 to $120,000 in incentives are currently injected directly into the BERA staking pool weekly, creating sustained buying pressure.

2. BGT Ecological Niche Protection: Retain 67% of incentives for BGT stakers, maintaining the project's incentive leverage effect while avoiding liquidity squeeze for governance token holders.

3. Triple positive feedback loop:

   • BERA staking increases chain security
   • An increase in the staking rate reduces circulating tokens
   • The incentive effect of reducing circulation volume amplifies the unit BERA.

3. Potential Impact on Market Structure

1. Retail Investors: Low Threshold Profit Capture Ordinary users only need to stake BERA to obtain dual benefits:

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

2. Developers: The Innovation Space of Main Token Economy The project team can utilize the revenue attributes of BERA to design new mechanisms, such as:

   • Automatically convert protocol income into BERA for repurchase
   • Develop a veToken model based on BERA
   • Create a derivative agreement collateralized by BERA

3. Investors: Reconstruction of Valuation Models The current market cap/TVL ratio of Berachain is 0.31, significantly lower than other emerging public chains. As BERA gains chain-level revenue capacity, its valuation logic may transition to a "discounted cash flow" model:

   Theoretical Market Value = ( Chain Annual Income × Price-Earnings Ratio Multiplier ) + ( Gas Demand × Inverse of Circulation Speed )

Based on the current weekly incentive of 100,000 USD, the annualized profit of 5.2 million USD corresponds to a 20x PE, implying a valuation of 104 million USD, not accounting for Gas consumption and future income growth.

4. Potential Risks and Challenges

1. Short-term gaming risk: Some BGT stakers may shift to other ecosystems due to reduced incentives.
2. Complexity of Mechanisms: Ordinary users still need to understand the interaction between PoL, BGT, and BERA.
3. Regulatory uncertainty: The compliance of the incentive mechanism is yet to be tested.

5. Industry Insights: L1 Competition Enters a New Stage of Value Distribution

The innovation of Berachain indicates that the focus of the next generation of public chain competition is shifting from performance and low cost to value distribution efficiency. While other public chains explore different revenue distribution methods, 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 inspire other L1 projects to follow suit. In the current context where the liquidity mining bonuses are fading, "how to create real demand for the chain itself" has become the key to determining the success or failure of a project. Berachain's answer is: make the native token the biggest beneficiary of ecological prosperity.