Key Insights:
Berachain's unique proof-of-liquidity consensus mechanism has attracted users to earn a passive income while getting validator rewards too.
This feature helped its TVL grow to $3.5 billion within a month of launch.
The price structure indicates a possible rally to $9 within a short term.
In the last six weeks, Berachain earned a decent reputation for becoming the fastest blockchain to achieve a multi-billion TVL. The blockchain was launched on 6 February 2025, and within a month and a week, Berachain managed to gain a TVL of $3.5 billion.
All of these took place when the crypto markets saw negative growth, with some of them crashing as high as 40% within a month. In the same period, Bitcoin lost around 25% in price, Ethereum lost 30%, XRP saw a major dip of 15%, and Solana dropped 40%.
Berachain not only managed to defend its TVL but indeed grew it to an all-time high of $3.5 billion. The reason for its steep growth rate can be attributed to its unique consensus mechanism, which makes it mandatory to lock a certain amount of liquidity in the blockchain's pools to become validators.
What also worked in favor of Berachain is the lack of liquidity in the crypto markets at the current time. At a point when the markets saw extreme liquidations, Berachain's liquidity reserves were poised to surge in demand.
After the US Federal Reserve indicated in its December meeting that it would be almost impossible to cut rates in 2025, the markets began reacting sharply to any move. Within a few weeks, we had Bitcoin below $80k, Ethereum at $2000, Solana around $120, and XRP near $2 levels. The markets also saw wide liquidations in the derivatives sector.
Berachain works on a unique consensus mechanism called Proof-of-Liquidity that mandates validators must deposit liquidity in its blockchain pools to be able to sign transactions and earn fees. This is slightly different than Proof-of-Stake, where validators stake their funds to sign transactions.
The difference between the two is Proof-of-Liquidty allows validators to earn in two ways, i.e., via liquidity reward and via validator rewards. This is not available in Proof-of-Stake consensus, where you do not earn extra rewards for staking; you just earn validator rewards.
To become a validator on Berachain, users must have at least 250k BERA tokens and be one of the top 69 validators. We expect this number to increase in the future as more validators join in.
At press time, Berachain was trading at $5.6, down by 4.5% over the last 24 hours. This correction was rather along the market trend and not due to any individual factor.
Since launch, Berachain has corrected around 5% (launch price $5.9 based on CMC listing), and since its last ATH on 6 Feb 2025, it has corrected almost 62%.
Berachain Token 1H Charts
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Berachain Token's 1H charts show that the crypto is under a short-term uptrend and has been bullish for the last 4 hours. The momentum indicators confirm the uptrend's strength. RSI has been increasing, and MACD was under a positive divergence at press time.
This week, if Berachain manages to cross $6.5, it would see a short rally to $7 crossing, which there opens a clear path till $9 without any resistance.
In the current markets, Berachain fits well as a liquidity provider, allowing the project to generate good revenue from it. Being an EVM-identical blockchain, Berachain can easily lend liquidity to other EVM compatible chains like Ethereum, BNB, Base and others.
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However, the native token BERA is a utility token and not useful for governance, which might confuse investors as to which one they should buy. In Berachain, governance rights are exercised using the Berachain Governance Token (BGT).
Our view is that the project could be a long-term bet for those who are willing to experiment with its technology and short-term bet for those who are looking to benefit from its unique market position as a liquidity provider till the US Fed cuts interest rates.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.