Berachain is a new Ethereum‑compatible Layer 1 blockchain that secures itself with “proof of liquidity,” rewarding users who supply liquidity instead of locking tokens away.
Its tri‑token design (BERA gas token, BGT governance token, HONEY stablecoin) plus EVM‑identical architecture aims to attract DeFi builders while keeping staked assets usable.
Berachain is an Ethereum‑compatible Layer 1 blockchain in public testnet (code‑name Artio) as of July 2025. It replaces traditional Proof of Stake with Proof of Liquidity, so staked assets stay available for DeFi. A tri‑token design separates gas fees, governance voting, and stable‑value functions.
What is Berachain?
Built by the pseudonymous Bera Builders collective
Identical to the Ethereum Virtual Machine, which lets Solidity contracts migrate without changes
Uses Proof of Liquidity to encourage deep on‑chain liquidity
Public mainnet expected after the current security‑audit program
How does Berachain work?
EVM‑identical architecture
The chain mirrors every Ethereum opcode, gas rule, and future upgrade, so tools such as MetaMask, Hardhat, and Foundry connect with no adjustments.
Proof‑of‑Liquidity consensus
Validators post whitelisted liquidity‑pool tokens rather than idle coins. These LP tokens continue earning fees while also staking, which keeps capital productive.
Wallet compatibility
Any wallet that supports custom EVM networks (for example MetaMask, Rabby, Ledger Live) connects by adding the Berachain RPC endpoint. Hardware wallets sign the same secp256k1 transactions used on Ethereum.
See our expert picks of the best crypto wallets.
Berachain tokenomics
BERA
Gas and block‑reward token. Inflation schedule and total supply will be finalised at mainnet genesis.
BGT
Non‑transferable token earned by validators and liquidity providers. It is used for on‑chain voting, grant approvals, and parameter changes.
HONEY
Over‑collateralised stablecoin that targets 1 USD. It is minted through debt positions that lock approved collateral.
Berachain ecosystem
BEX
Native decentralised exchange that rebates part of gas costs to BGT voters.
BEND
Lending market where users borrow HONEY or leverage staked assets.
BERP
Perpetual‑swap platform with up to 20 times leverage on major trading pairs.
Additional projects in development include NFT markets, liquid‑staking derivatives, and cross‑chain bridges.
Berachain key features
EVM identical execution layer: seamless contract migration from Ethereum
Proof of Liquidity: staked capital continues to earn DeFi yield
Tri‑token design: gas (BERA), governance (BGT), and stablecoin (HONEY) functions are separate
BeaconKit client framework: modular consensus upgrades without hard forks
Optional gasless or subsidised transactions for selected on‑chain actions
Berachain pros and cons
Pros
Staked liquidity remains usable in DeFi
Easy migration for Ethereum‑based applications
Separate tokens align economic incentives
Cons
Mainnet not yet live so security is untested
Core builders remain pseudonymous
Future regulatory status is uncertain
What decentralized applications are available on Berachain?
The Artio testnet hosts several early DeFi applications. Users can trade ERC‑20 pairs on BEX, borrow HONEY on BEND, and open leveraged positions on BERP. Production deployments will begin after the mainnet launch.
Learn about DeFi taxes in our DeFi tax guide.
Ethereum versus Berachain
Age: Ethereum launched in 2015 while Berachain is still in testnet.
Consensus: Ethereum uses Proof of Stake; Berachain uses Proof of Liquidity.
Token design: Ethereum combines gas and governance in ETH; Berachain separates those roles into BERA and BGT.
Liquidity: Ethereum staking locks assets; Berachain staking keeps liquidity active.
Ecosystem size: Ethereum hosts thousands of applications; Berachain is an emerging network with growth potential.
What is the Berachain airdrop?
No official airdrop details exist as of July 2025. Community speculation suggests that early testnet users and liquidity providers could receive BERA or BGT, but snapshots, eligibility rules, and token amounts remain unannounced.
Learn how crypto airdrops are taxed.
How is Berachain taxed?
US taxpayers should treat:
Airdrops or faucet distributions – ordinary income at fair‑market value on receipt
Validator or staking rewards – ordinary income on the credit date; later sales create capital gains or losses
Swaps on BEX or trades on BERP – capital gains or losses reportable on Form 8949
Liquidity‑pool incentives such as extra BGT – ordinary income when credited
Non‑US residents must follow their domestic capital‑gains and income statutes.
Tax implications for Berachain
Accurate records are critical. Capture the USD value for every reward, swap, and airdrop, and track gas fees to adjust cost basis. File Form 8949 with Schedule D for disposals, and Schedule C if you operate a validator as a business.
