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," where the main tokens struggle to directly benefit from ecosystem growth. The PoL (Proof of Liquidity) mechanism proposed by Berachain attempts to address this issue through chain-level incentive redistribution. The key innovation in version 2 lies in shifting 33% of the decentralized application incentives from BGT stakers to BERA stakers. This seemingly minor adjustment actually represents a significant shift in the value model of mainnet assets.

Although PoL v1.0 successfully promoted the growth of the total value locked (TVL) in the ecosystem, the main revenue flowed to BGT and its derivatives. The v2 version introduces a "dual channel allocation" model (67% BGT/33% BERA), allowing main coin holders to earn protocol layer revenue without participating in complex DeFi strategies for the first time, essentially upgrading the Gas token into a revenue-generating asset.

2. Ingenious Mechanism Design

1. Non-inflationary returns: v2 has not increased new token issuance, but instead has created chain-level cash flow for BERA by reallocating existing incentives. According to the data, approximately $50,000 to $120,000 in incentives currently flow directly into the BERA staking pool each week, creating sustained buying pressure.

2. BGT Ecological Niche Protection: Retain 67% of incentives for BGT stakers, which maintains the incentive leverage effect of the project while avoiding liquidity withdrawal by governance token holders.

3. Triple Positive Feedback Loop:

   • More BERA staking brings higher chain security.
   • A higher staking rate reduces circulating chips
   • A lower circulation amplifies the incentive effect on the yield of each BERA unit.

3. Potential Impact on Market Structure

1. For ordinary users: lower the participation threshold. Ordinary users can now earn two types of rewards by staking BERA.

   • Direct income: 33% incentive allocation (estimated annual return rate of 9-15%)
   • Indirect income: Protocol revenue dividends from native decentralized exchanges

2. For Developers: New Gameplay of Main Currency Economy The project party can utilize the revenue attributes of BERA to design new mechanisms, such as:

   • Automatically convert protocol income to BERA for repurchase
   • Develop the veToken model based on BERA
   • Create a derivative agreement secured by BERA

3. For Investors: Reconstruction of Valuation Models As BERA gains chain-level revenue capabilities, its valuation logic may shift towards a "discounted cash flow" model: Theoretical Market Value = ( Chain Annual Income × Price-Earnings Ratio ) + ( Gas Demand × Inverse of Circulation Velocity )

Based on the current weekly incentive of $100,000, an annualized profit of $5.2 million corresponds to a 20x price-to-earnings ratio, implying a valuation of $104 million, not taking into account Gas consumption and future revenue growth.

4. Risks and Challenges Faced

1. Short-term speculative risk: Some BGT stakers may shift to other ecosystems due to reduced incentives.
2. Complexity of Mechanism: Ordinary users still need to understand the interrelationship between PoL, BGT, and BERA.
3. Regulatory uncertainty: The compliance of the incentive mechanism is yet to be tested.

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

The exploration of Berachain reveals a trend: the competitive focus of the new generation of public chains is shifting from performance and low gas fees to value distribution efficiency. While other public chains attempt various methods to distribute profits or support prices, PoL v2 demonstrates a more native solution—injecting ecological value directly into the main coin through protocol layer design.

If this model can be continuously validated, it may inspire other L1 projects to follow suit. In the current context where the liquidity mining bonus is fading, "how to create real demand for public chains" has become a key issue determining the survival of projects. Berachain's answer is: make the main coin the primary beneficiary of ecological prosperity.