Build-a-Berachain

Introduction

Berachain is an EVM-identical Proof-of-Liquidity blockchain, built upon the Cosmos SDK. The chain is built on top of BeaconKit, which was developed by Berachain. It has a block time under 2 seconds and instant finality.

The main goals of PoL are to separate the tokens used to provide security and pay for transactions, to ensure that liquidity onchain remains high, to increase capital efficiency and to align interests between various stakeholders (protocols, validators and users) within the ecosystem.

Unlike in a PoS system, where validators and delegators receive rewards for staking, in PoL, validators and users  receive rewards by providing liquidity to applications on Berachain via governance approved reward vaults. For example, users can provide liquidity on the BEX (the native Berachain AMM DEX) or any other venue earning BGT).

Source: https://docs.berachain.com/learn/what-is-proof-of-liquidity

Delegators (i.e. users) can then delegate their BGT (Bera Governance Token) that they earned through providing liquidity to applications via governance approved reward vaults . In turn, validators produce blocks, and earn rewards, in the form of BGT. Validators then route a portion of BGT emissions (after keeping a commission for validating) to reward vaults, which distributes the emitted BGT to delegators who had delegated with the validator. In addition to earning emitted BGT, delegators also earn fees from Berachain’s native applications in the form of $HONEY, the native stablecoin of Berachain.