Berachain Allocates 33% of PoL Incentives to BERA Rewards

Berachain has introduced a new proposal for its Proof of Liquidity (PoL) upgrade, which includes allocating 33% of PoL incentives to BERA rewards. This initiative aims to enhance liquidity and encourage participation within the Berachain ecosystem. The proposal, shared on the mainnet’s public forum, introduces a new model called “PoL v2.” This model redirects 33% of the current PoL incentives, which are issued to BGT boosters, into a new rewards model to support liquidity for the protocol’s native token BERA (BERA).

According to Berachain’s co-founder, Smokey the Bera, this move creates a native, protocol-level yield source for BERA holders, driving demand and utility without displacing existing stakeholders. The protocol is currently seeking feedback from the Berachain community until July 20. If the proposal gains a majority vote of approval, the mainnet will go live on July 21 this year.

Under the new model, BERA holders will be able to receive additional income directly from the protocol. The mechanism is designed to support the token’s utility and earning potential, making it more attractive for holders. Additionally, the model implements a seven-day “unbonding” period for staked BERA, which would suppress arbitrage and encourage holders to keep their BERA tokens long-term instead of falling into short-term token farming patterns.

Smokey also noted several other tokens which have implemented similar models, which include HYPE (HYPE), ENA (ENA) and KAITO (KAITO). The model also supports LST staking, which would enable BERA stakers to earn validator rewards alongside yield from Proof of Liquidity. During the unstaking period, the unstaked BERA amount will not receive further rewards.

This proposal reflects Berachain's commitment to innovation and its efforts to create a more liquid and efficient market for its native token, BERA. By setting aside a significant portion of the PoL incentives for BERA rewards, Berachain aims to attract more liquidity providers and incentivize them to participate actively in the network. This approach not only enhances the overall liquidity of BERA but also strengthens the platform's position in the competitive blockchain landscape.

The allocation of 33% of PoL incentives to BERA rewards is a strategic decision that reflects Berachain's focus on liquidity and user engagement. By redirecting these incentives, the platform aims to create a more attractive environment for liquidity providers, thereby increasing the overall liquidity of BERA. This move is expected to have a positive impact on the platform's ecosystem, as it encourages more users to participate and contribute to the network's growth.

The new PoL upgrade proposal is a significant development for Berachain, as it demonstrates the platform's commitment to innovation and its efforts to create a more liquid and efficient market for its native token. By allocating a substantial portion of the PoL incentives to BERA rewards, Berachain aims to attract more liquidity providers and incentivize them to participate actively in the network. This strategic move is expected to have a positive impact on the platform's ecosystem, as it fosters a more robust and dynamic environment for users and liquidity providers alike.