The decentralized finance (DeFi) landscape is witnessing a seismic shift, and Berachain is at the epicenter of this transformation. With its Total Value Locked (TVL) skyrocketing to $3.351 billion, the Berachain ecosystem is rapidly emerging as a major force in blockchain innovation. This explosive growth is powered by its groundbreaking Proof-of-Liquidity (PoL) consensus mechanism—a radical departure from traditional models that’s redefining how liquidity, security, and governance intersect in Web3.
What Is Proof-of-Liquidity and How Does It Work?
At its core, Berachain is an EVM-compatible Layer 1 blockchain designed to solve one of DeFi’s most persistent challenges: sustainable liquidity. Unlike conventional Proof-of-Stake (PoS) networks where users stake tokens to secure the network, Berachain flips the script with its Proof-of-Liquidity (PoL) model.
Instead of passive staking, users are incentivized to actively provide liquidity across DeFi protocols within the ecosystem. By depositing assets into liquidity pools—such as those on decentralized exchanges like Kodiak or staking platforms like Infrared Finance—users earn the Berachain Governance Token (BGT). Notably, BGT is currently non-transferable, meaning it can't be bought or sold on open markets. It exists solely as a reward for liquidity provision and grants voting power in network governance.
This design aligns user incentives directly with ecosystem health: the more liquidity you contribute, the more governance influence and rewards you accumulate. Validators are also selected based on their BGT holdings, creating a feedback loop where active participation strengthens both network security and decentralization.
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Meteoric Rise in TVL: A Sign of Strong Fundamentals
According to data from DefiLlama, Berachain’s TVL has surged to $3.351 billion, marking a 15.76% weekly increase—an impressive feat for a network that only launched its mainnet in February 2025. This rapid adoption reflects strong market confidence and organic user engagement.
Key drivers behind this surge include:
- Infrared Finance: A leading liquidity staking protocol enabling users to earn yield while supporting network stability.
- BEX and Kodiak DEXs: High-performance decentralized exchanges offering low-slippage trading and deep liquidity pools.
- Native token momentum: The BERA token has seen over 37% price appreciation in just seven days, signaling strong investor sentiment.
With a current market cap of $880 million** and a fully diluted valuation of **$4 billion, Berachain operates with a circulating supply of 108 million BERA tokens. These metrics place it among the most promising new-generation blockchains, surpassing established networks like Avalanche (AVAX) and Arbitrum (ARB) in TVL despite its recent launch.
Why Investors Are Taking Notice
Berachain’s rise isn’t just speculative—it’s rooted in tangible innovation and institutional backing. The project has secured significant funding from top-tier crypto investors:
- $42 million Series A in April 2023, led by Polychain Capital
- $100 million Series B in 2024, co-led by Polychain Capital and Framework Ventures
- Post-Series B valuation: $1.5 billion
These investments underscore confidence in Berachain’s long-term vision and technical execution. Moreover, the PoL model addresses a critical flaw in many PoS chains: idle staked capital. By requiring active liquidity contribution, Berachain ensures that economic value is continuously circulating within the ecosystem, enhancing capital efficiency and protocol resilience.
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Institutional Adoption: Bitcoin Suisse Adds BERA
One of the clearest signs of Berachain’s growing legitimacy is its inclusion by Bitcoin Suisse, a leading digital asset financial services provider. The firm has added BERA to its trading and custody offerings, giving institutional and retail clients:
- 24/7 access to BERA trading
- Enterprise-grade custody solutions
- Exposure to cutting-edge DeFi infrastructure
This move not only boosts liquidity but also signals broader acceptance within traditional finance circles. As Bitcoin Suisse noted, integrating Berachain allows them to offer clients access to “cutting-edge innovations in the digital asset sphere.”
Can Proof-of-Liquidity Sustain Long-Term Growth?
While Berachain’s early success is undeniable, questions remain about the long-term sustainability of PoL.
Strengths of the Model
- Encourages deep, organic liquidity
- Reduces reliance on inflationary token emissions
- Aligns governance power with real economic contribution
- Enhances security through active validator participation
Potential Challenges
- Non-transferable BGT: Some users may be deterred by the inability to trade governance tokens, limiting short-term profit motives.
- Liquidity concentration risk: Validators with large BGT stakes could accumulate disproportionate influence over time.
- Vulnerability during market downturns: A sudden withdrawal of liquidity could threaten network security if participation drops sharply.
Despite these concerns, Berachain’s approach represents a bold experiment in aligning economic incentives with network health. It joins other innovative projects like RedStone, an Ethereum-based oracle solution also added to Bitcoin Suisse’s platform, in pushing the boundaries of what blockchain technology can achieve.
Frequently Asked Questions (FAQ)
Q: What makes Berachain different from other Layer 1 blockchains?
A: Berachain introduces Proof-of-Liquidity (PoL), which rewards users for providing liquidity instead of staking. This creates a self-reinforcing cycle where DeFi activity directly contributes to network security and governance.
Q: Can I trade BGT tokens?
A: No. BGT tokens are non-transferable and cannot be traded. They are earned solely through liquidity provision and are used for governance voting within the ecosystem.
Q: How does Berachain compare to Avalanche or Arbitrum in terms of TVL?
A: As of now, Berachain has surpassed both Avalanche and Arbitrum in Total Value Locked (TVL), reaching $3.351 billion—despite launching its mainnet only recently in February 2025.
Q: Is BERA available on major exchanges?
A: While specific exchange listings vary, BERA’s inclusion by Bitcoin Suisse indicates growing institutional accessibility and trust in the asset.
Q: What risks are associated with Berachain’s PoL model?
A: The primary risks include potential centralization of governance among large liquidity providers and vulnerability during periods of low market activity or sudden liquidity withdrawals.
Q: How can I participate in the Berachain ecosystem?
A: Users can participate by providing liquidity on native DeFi platforms like Kodiak or Infrared Finance to earn BGT, or by holding and using BERA for transactions and governance participation.
Berachain is more than just another blockchain—it’s a reimagining of how decentralized networks can sustainably grow through aligned incentives. With record-breaking TVL, strong institutional support, and a novel consensus model, it stands out as one of the most compelling projects in the 2025 crypto landscape.
Whether PoL becomes a new standard or evolves into something even more advanced, one thing is clear: Berachain has ignited a new chapter in DeFi innovation.
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