I noticed an interesting point: Berachain is about to complete its subsidy period and move towards self-sustainability. A major fiscal reform just took place, which the community called sovereign — the annual inflation $BGT has dropped from 8% to 5%, meaning issuance has decreased by approximately 46%. Additionally, about 200 inefficient treasuries were closed, and access criteria for the remaining ones were tightened. Sounds like a serious turning point.

For those not in the know: Berachain operates on a PoL (Proof-of-Liquidity) mechanism, not a traditional PoS. The system is built around three tokens with different roles. $BERA — is the network fuel, $HONEY — is the native stablecoin serving as the unit of account within the ecosystem, providing stability to the on-chain economy. And $BGT — is a non-transferable token that controls the distribution of incentives and the direction of reward flows. It is through $BGT that validators influence where the money goes.

At launch, Berachain used a classic cold-start strategy: high inflation of 8-10% attracted capital, and it worked. But as the ecosystem began to grow and mature, problems arose. High yields attracted too much speculative capital, some treasuries became inefficient, and constant high issuance diluted the value of $BGT itself. If incentives turn into pure subsidies without real ROI, the long-term value of the network will suffer.

Reducing inflation from 8% to 5% is a key step toward what they call “price sovereignty.” Staking rewards have fallen from 1.2 to 0.65, and these are not just numbers. When new issuance decreases, each token issued becomes more valuable. Marginal dilution for holders and delegators decreases. This enhances $BGT ’s status as a reliable management asset.

But the reform is not only about reducing issuance. Berachain also revamped its incentive distribution system. Previously, the logic was “first come, first served.” Now, a multi-factor assessment is introduced: does the protocol generate real trading volume, attract external funding, create observable network effects? In short, incentives now need to be earned, not just received for free.

This resembles the evolution of Ethereum and other major L1s, where decreasing inflation often signals a transition to maturity. Berachain essentially says: we no longer need massive subsidies; now we need quality protocols that are self-sustaining. When the incentive budget shrinks, protocols start racing for efficiency, creating space for genuine projects.

In the new model, incentives act as targeted capital accelerators rather than just giveaways. Every unit of $BGT issued into the ecosystem should generate real trading volume, fees, liquidity — creating a positive cycle where the value of the incentive is less than the income it generates. This is what they mean by “Bera Builds Businesses” — not just scaling, but real commercial growth.

Basically, this is a shift from a subsidy model to a productive capital model with a certain ROI. For $BGT holders, this should mean more reliable long-term value signals. It will be interesting to see how this impacts dynamics in the coming quarters.