By BlesdBera | May 11, 2025
Berachain just dropped its biggest governance proposal to date—and under the hood, it’s quietly one of the most significant value-alignment pivots a Layer 1 has made this cycle.
Titled “PoL v1.1: BERA in Control,” the proposal outlines how Berachain plans to shift its incentive engine into a long-term flywheel for the chain’s native token. The proposal doesn’t just tweak yield mechanics. It repositions $BERA from a passive gas token into a foundational asset that owns its own liquidity.
TL;DR:
- 20% of PoL incentives → permanent LP for $BERA
- Fees from BEX → auto-liquidity compounding
- Staked BERA → validators powering ecosystem projects
- PoL vault entry rules relaxed → more protocols can plug in
The result? A real value loop is starting to form.
From Yield Mining to Liquidity Infrastructure
Since PoL launched just over a month ago, the system has moved more than $10M in incentives and distributed $14M+ in BGT. It works: validators route incentives to where they’re needed most, and BGT holders get paid.
But there’s a catch: none of that value accrues to $BERA.
That disconnect is what PoL v1.1 aims to solve—without tearing down the existing system.
“We’re not breaking PoL,” wrote Smokey, co-founder of Berachain. “We’re building on it. And we’re making sure BERA is in control.”
Here’s How It Works
At the core of the proposal is a simple mechanism: incentive redistribution.
- Apps using PoL to distribute incentives will see a 20% protocol fee taken at the time of distribution.
- That fee is not sold. Instead, it’s used to provide liquidity in key pairs like BERA-HONEY and BERA-Majors on BEX.
- This liquidity is owned by the protocol and never withdrawn—creating permanent, compounding LP that earns fees.
- Those fees are either recycled into PoL incentives, used to deepen liquidity, or staked into validators supporting native apps like BEX, BEND, and others.
"You're not just farming anymore,” said one community member. “You're helping BERA build a treasury.”
What This Means for the Ecosystem
Let’s break it down:
- $BERA accrues value as the protocol accumulates liquidity it controls.
- Yield is no longer extractive—fees stay in the system.
- Validators become more strategic, as BERA can be staked to route emissions toward meaningful projects.
- New protocols onboard faster, thanks to looser vault restrictions.
Put simply, the chain is starting to own its economic base—and use it to align apps, LPs, and long-term network health.
“This is a chain that farms yield—with purpose,” one ecosystem founder said.
What’s the Catch? Let’s Talk BGT
The proposal doesn’t come without tradeoffs. BGT holders—who’ve been the primary beneficiaries of PoL yields—will take a modest hit.
The protocol estimates a ~14% compression in the BGT premium, from ~1.45x down to ~1.25x, due to a reduced share of incentives flowing directly to boosters.
Ravenium, a long-time Bera contributor, summed it up in a recent thread:
“APR drops slightly. But BERA grows stronger, and so does the chain. That’s how you survive a cycle.”
Leveraged stakers and LST protocols like iBGT may feel the squeeze—but many see the move as evolutionary, not punitive. Yield is still strong, and BGT retains its role as the right to farm on Berachain.
Why the Market Should Care
This isn’t just another tokenomics tweak. It’s Berachain building out what DeFi has long talked about but rarely delivered: a protocol-native value loop that reinforces itself.
The flywheel is clear:
Apps incentivize → Protocol takes a cut → Builds COL → COL earns yield → Yield feeds PoL → $BERA gains demand and depth → Apps get better liquidity → Repeat
“This is the first L1 I’ve seen where liquidity mining doesn’t just end in a farm-and-dump,” said one investor familiar with the proposal. “It builds.”
What Comes Next?
The proposal is now in its community feedback phase. If no major objections are raised, it will move to a vote by the BGT Foundation within a week.
Meanwhile, questions remain:
- Will the 20% flat rate evolve into a dynamic fee? (The team says yes.)
- Will collected assets be deployed automatically or managed by the Foundation?
- Will other L1s follow suit and start owning their own liquidity, too?
Berachain isn’t waiting to find out. It’s shipping, fast.
Final Thoughts
PoL v1.1 is more than an upgrade—it’s a signal. Berachain isn’t just coordinating incentives anymore. It’s structuring them to reinforce the chain itself.
This is how an L1 becomes more than a sandbox for dApps. It becomes an economic engine. One that can farm, yield, and govern—without leaking value.
“We’re not just rewarding users,” said Smokey. “We’re building a chain that owns what it creates.”
And if v1.1 passes, that ownership starts now.