Berachain launches "Liquidity Proof" system, initiating governance phase
The Layer 1 blockchain Berachain, based on EVM, will launch its Proof-of-Liquidity (PoL) system today, marking the official start of the first phase of its on-chain governance. The PoL system aims to decentralize the supply of Berachain's governance token BGT for on-chain governance. The initial implementation will take place in specific DeFi liquidity pools and Berachain developers say they plan to add new reward vaults beyond the initial DEX pool.
Berachain's PoL method encourages users to provide liquidity for the network while allowing these assets to remain available. Unlike traditional Proof-of-Stake (PoS) blockchains that lock tokens, Berachain encourages users to pledge assets in DeFi liquidity pools to earn governance tokens BGT. Validators then rely on BGT delegated to them to enhance their influence in consensus, which means network security (through validators) is closely linked with ecosystem liquidity.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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