Coinspeaker
Berachain, DeFi-focused Layer-1 Platform, Secures $42M in Series A Funding
On Thursday, April 20, DeFi-focused Layer 1 platform Berachain announced that it had raised a total of $42 million in Series A funding at a valuation of $420 million.
Polychain Capital led the fundraising, already finalized in December 2022, along with other investors such as da05, Hack VC, Tribe Capital, CitizenX, Shimla Capital, and Robot Ventures. Along with it, several undisclosed centralized exchanges also chose to participate.
DeFi-focused project Berachain has made a lot of noise in the crypto space. Three pseudonymous founders Papa Bear, Smokey the Bera, Dev Bear, and Homme Bera, launched this product and described themselves as crypto natives.
The origin of Layer 1 Berachain traces back to an NFT collection Bong Bears founded by three pseudonymous co-founders and launched back in August 2021. Berachain’s OpenSea description reads that “100 absolutely zooted NFT bears getting baked”.
However, the project’s name and its founder’s name Smokey are complete misnomers.
During the launch of Berachain, its founding members team derived inspiration from the rebasing protocol OlympusDAO, which had rapidly started gaining traction in the crypto community. During the fall of 2021, OlympusDAO’s native token OHM traded at a high of $1,300.
Bong Bears followed the footsteps of OlympusDAO thereby creating the first-ever collection of rebasing NFTs. This further spread across several other collections such as Boo Bears, Bonf Bears, Baby Bears, Bit Bears, and Band Bears.
Smokey said that pivoting from Bong Bears NFT to launching a full-fledged Layer-1 platform Berachain is not far-fetched. Speaking to CoinDesk, Smokey added:
“Bong Bears bootstrapped a community of DeFi enthusiasts. What if we could take some of the liquidity and make it useful?”
Berachain’s Proof-of-Liquidity Protocol
Berachain noted that its technology will allow the use of staked assets in DeFi protocols. This will lead to creating more liquidity and capital efficiency on-chain. Currently, Berachain allows the locking of staked assets such as staked Ether (ETH) and thus uses these assets to secure the underlying blockchain network.
Berachain noted that its “proof-of-liquidity” consensus system will allow users to simultaneously stake assets on Berachain while using those assets to trade, borrow, or lend on-chain.
Berachain already has more than $250 million in committed capital to deploy and is planning to launch a public-incentivized testnet in the coming weeks. Smokey said: “In a lot of cases, liquidity is mercenary. The reason why they’re mercenary is that you can’t do much with stake assets, they just sit there.” Speaking of the development, Polychain founder Olaf Carlson-Wee said:
“Berachain … provides the first structure which aligns incentives between liquidity and security at the chain level, creating a massive opportunity to absorb the majority of liquidity and turn it into a sticky, capital efficient base for DeFi platforms to build on top of”.
Berachain also stated that it will launch its native gas token BERA as well as its governance token BGT. Furthermore, it will also have its own stablecoin, HONEY. “If people want to think that we’re a rug, I would tell them to do their own research. There’s a nontrivial history of pseudonymous projects doing good things,” said Smokey.
Berachain, DeFi-focused Layer-1 Platform, Secures $42M in Series A Funding
