PoL v2: A New Value Capture Model for Berachain

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

Traditional public chains have long faced the "mainnet asset dilemma"—while core tokens bear basic functions, they struggle to directly share in the ecological growth dividends. Berachain attempts to address this issue through an improved PoL (Proof of Liquidity) mechanism. The key to version 2 lies in shifting one-third of DApp incentives from BGT stakers to BERA stakers, marking a significant transformation in the value model of mainnet assets.

PoL v1.0 successfully promoted the growth of ecological TVL, but the earnings mainly flowed to BGT and its derivatives. The v2 version achieved for the first time that main coin holders could obtain protocol layer earnings without complex operations through the "dual-channel allocation" (67% BGT/33% BERA) model, essentially completing the upgrade of BERA from "fuel token" to "yield asset."

2. Highlights of Mechanism Design

1. Non-inflationary returns: v2 does not increase token issuance, but rather restructures the flow of existing incentives to bring chain-level cash flow to BERA. Approximately $50,000 to $120,000 in incentives are directly injected into the BERA staking pool each week, creating sustained buying pressure.

2. BGT Ecological Niche Protection: Retain 67% of incentives for BGT stakers to maintain the incentive effect for the project party while avoiding liquidity runs on governance token holders.

3. Triple Positive Feedback Loop:

   • BERA staking increases chain security
   • Higher staking rates reduce circulating chips
   • Reduced circulation amplifies BERA earnings

3. Potential Impact of Market Structure

1. For ordinary users: low-threshold profit capture Users only need to stake BERA to earn double rewards:

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

2. For Developers: New Gameplay of Main Coin Economy New mechanisms can be designed based on the yield attributes of BERA, such as:

   • Protocol income automatically converts to BERA buyback
   • Develop the BERA-based veToken model
   • Create derivative agreements collateralized by BERA

3. For investors: Valuation model reconstruction After BERA obtains chain-level revenue capabilities, its valuation logic may transition to "discounted cash flow:" Theoretical Market Value = ( Chain Annual Income × Price-to-Earnings Ratio ) + ( Gas Demand × Inverse of Circulation Velocity )

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

4. Risks and Challenges

1. Short-term gaming risk: Some BGT stakers may shift to other ecosystems due to incentive dilution.
2. Complexity of Mechanisms: Ordinary users still need to understand the interaction between PoL/BGT/BERA.
3. Regulatory Uncertainty: The compliance of the incentive mechanism has yet to be verified.

V. Industry Insights: L1 Competition Enters the Deep Water Zone of Value Distribution

The exploration of Berachain reveals a new trend: the focus of next-generation public chain competition is shifting from performance to efficiency in value distribution. While other public chains attempt various methods to distribute profits, 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 prompt other L1s to imitate it. In the current situation where the liquidity mining rewards are fading, "how can the chain create real demand for itself" becomes a key proposition. Berachain's answer is: let the main token be the primary beneficiary of ecological prosperity.