Umair
Berachain activated its long-anticipated Proof of Liquidity (PoL) system on March 24, a new incentive framework to redefine block rewards distribution.
The network’s native token, BERA, was up 16% over the past 24 hours and trading at $7.89 as of press time.
The rollout introduced 37 reward vaults, now live on the blockchain. These vaults are smart contracts eligible to receive BGT emissions, which protocols can use to distribute rewards to users.
According to the official Berachain announcement, vault incentives will become claimable by March 25, and emissions will ramp to full annual percentage yield (APY) over the next three days. This marks a reduction from the previous seven-day timeline.
In less than two months, Berachain became the fifth-largest blockchain by total value locked, reaching $5.3 billion.
PoL framework and incentives
The PoL mechanism operates through a dual-token model. Validators stake BERA for chain security and rewards, while investors use BGT for governance and block reward allocation.
Under the new framework, validators receive BGT emissions based on their delegated BGT boost percentage. These emissions are then directed to the reward vaults of the validator’s choosing, enabling protocols to use those emissions as user incentives.
This distribution layer adds flexibility to Berachain’s validator economics. The blockchain incentivizes validators to direct emissions to maximize the protocol-provided incentives they receive efficiently.
As new vaults come online, users supplying liquidity to various protocols — whether through staking, swapping, or yield farming — can earn BGT by staking receipt tokens.
Berachain’s validator set is limited to the top 69 validators by staked BERA, with a minimum entry requirement of 250,000 BERA and a cap of 10 million BERA. The probability of proposing a block within the active set is proportional to the validator’s stake.
When selected, validators receive a fixed base reward and a variable BGT reward, depending on their relative boost level.
Competing to attract liquidity
The launch of Proof of Liquidity marks a structural shift in Berachain’s economic design by aligning block reward issuance with application usage and user engagement through a live, real-time incentive layer.
As a result of the new rewards framework, protocols within the Berachain ecosystem will now compete to attract liquidity by offering compelling vault incentives.
These protocols effectively bid for validator-directed emissions, refreshed every five hours based on updated validator allocations.
Berachain has also created the BeraHub, which gives participants transparency in the rewards flow and distribution by tracking emissions and vaults in real time.
Decentralized application teams are integrating all metadata associated with the vaults, including token logos and pool names, as part of the broader deployment process.
