PoL v2: The Value Distribution Innovation of Berachain

1. Breakthrough from Liquidity Incentives to Value Circulation

Traditional public chains have long faced the "mainnet asset dilemma," where the main tokens fulfill basic functions but struggle to directly capture the growth of ecological value. Berachain attempts to address this issue through the PoL (Proof of Liquidity) mechanism, while the core of the v2 version lies in shifting 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 successfully promoted the growth of ecological TVL, but 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 earn protocol layer rewards without participating in complex DeFi strategies, essentially completing the upgrade from "Gas token to yield asset."

2. Clever Mechanism Design

Non-inflationary yield: v2 restructures the existing incentive flow, allowing BERA to gain chain-level cash flow. According to data, incentives of approximately $50,000 to $120,000 are directly injected into the BERA staking pool each week, creating continuous buying pressure.

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

Triple positive feedback loop:

1. More BERA staking enhances chain security.
2. A higher staking rate reduces circulating chips
3. Incentive returns of BERA with reduced circulating supply

3. Potential Impact on Market Structure

1. Retail Investors: Low Threshold Profit Capture

Ordinary users can now earn two types of returns by staking BERA.

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

Compared to other L1s, Berachain's "staking is earning" model significantly lowers the participation threshold.

2. Developer: A new way to play with the main currency economy

The project team can utilize the yield attributes of BERA to design new mechanisms, such as:

• Automatically convert protocol revenue to BERA for repurchase.
• Develop the BERA-based veToken model
• Create a derivative agreement collateralized by BERA

3. Investors: Reconstruction of Valuation Models

The current market value/TVL ratio of Berachain is 0.31, lower than other new public chains. As BERA gains chain-level revenue capabilities, its valuation logic may transition to "discounted cash flow":

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

Based on a weekly incentive of $100,000, an annualized profit of $5.2 million corresponds to a 20x PE, implying an implied valuation of $104 million, not accounting for Gas consumption and future revenue growth.

4. Potential Risks and Challenges

• Short-term speculation risk: Some BGT stakers may shift to other ecosystems due to incentive dilution.
• Complexity of the mechanism: Ordinary users still need to understand the interaction between PoL, BGT, and BERA.
• Regulatory uncertainty: The compliance of the incentive mechanism 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 performance to value distribution efficiency. While other public chains are trying various ways to distribute profits, PoL v2 demonstrates a more native solution—injecting ecological value directly into the main coin through protocol layer design.

If this model can continue to be validated, it may lead other L1s to imitate. At a time when the liquidity mining bonuses are fading, "how the chain creates real demand for itself" has become a key question determining the life and death of projects. Berachain's answer is: to make the main token the primary beneficiary of ecological prosperity.