What is Proof-of-Liquidity? 🤝

Proof-of-Liquidity (PoL) is a novel consensus mechanism that aligns and increases the security of the chain by increased liquidity deployed on chain.

PoL borrows from the Proof-of-Stake (PoS) concept of securing a chain by providing an initial stake with the native gas token. PoL builds upon PoS by introducing an additional soulbound governance token that both determines the potential reward weight for a staker, through delegation by others, and is rewarded to parties that have provided liquidity to the chain through governed reward vaults.

This separates token responsibility for gas and security from tokens used to govern chain rewards.

For Berachain, that is the native gas token $BERA, and the non-transferrable Berachain Governance Token ($BGT).

Read more in Proof-of-Liquidity Overview