Berachain's capital inflow of $360 million ranks second among public chains. Can the "Liquidity narrative" last?

Author: Frank, PANews

Against the backdrop of the recent overall slump in the crypto market, Berachain ranks second in the public chain track with a net inflow of $360 million in nearly a month, making it one of the few Layer 1 projects to grow against the trend. After the mainnet launch, its Total Value Locked (TVL) stabilized at $2.9 billion, placing it sixth across the network, validating the attractiveness of its Proof of Liquidity (PoL) mechanism for staked funds.

However, the ecosystem also faces some controversies, such as the drastic fluctuations in the price of the BERA token, the uneven distribution of airdrops raising questions about fairness, and the co-founders publicly reflecting on the token economic model. After the airdrop ends, can Berachain regain community trust through the liquidity narrative of the PoL mechanism, transforming from a new force into an evergreen entity?

ranked second in net capital inflow within the month, with TVL entering the top six.

The capital inflow situation is the most impressive data for Berachain. As of March 18, the net capital inflow of Berachain in the past month is approximately $360 million, second only to Base. During a period when the market is down and various public chain ecosystems are in a sluggish state, Berachain’s capital inflow situation is indeed remarkable.

However, upon careful analysis, it can be seen that the concentration of funds flowing into Berachain mainly occurred between February 16 and March 3. During this period, it coincided with the launch of the Berachain mainnet, the release of the testnet, and the airdrop claiming phase. Therefore, it seems expected that a batch of funds would flow in.

In addition to net capital inflow, Berachain’s TVL has remained relatively stable since the mainnet launch, with no dramatic explosive growth and no significant decline due to market changes. As of March 18, Berachain’s TVL is approximately $2.9 billion. In terms of overall data comparison, Berachain’s TVL ranks sixth among all networks, with only Bitcoin, Ethereum, Solana, BSC, and Tron having higher TVL. From this perspective, Berachain’s PoL (Proof of Liquidity) consensus mechanism has a certain inherent advantage in attracting staking funds.

Among them, the most funds are staked in Infrared Finance, which is the main application of the liquidity consensus mechanism of the Berachain network.

In addition to the impressive effect of funding introduction, network activity is also a test of the actual health index of a new public chain. According to the official data from Berachain, the number of daily active users experienced a significant rise and fall. Between February 4 and February 10, the number of daily active addresses surged to over 2 million, and after returning to normal, it stabilized at around 10,000 addresses. In the past month, the average number of daily active addresses on Berachain is about 13,400. Compared to several other mainstream public chains, this data still has a large gap, but relatively speaking, it is currently stable. Further activity levels will require a larger time sample to clarify the issues.

At the data level, the most concerning aspect is undoubtedly the performance of the tokens. The BERA token is also the most controversial source related to Berachain recently.

From the chart, it can be seen that the BERA token surged to $15.5 after its launch before starting to decline, which is generally similar to the performance of most large airdrop projects. However, in the subsequent market, BERA exhibited significant volatility, oscillating repeatedly within the range of $5 to $9. It often surged nearly 90% within a few days, then dropped 40% back to its original point. However, due to the limited supply in the early market after the project launched, it was relatively easy to generate drastic fluctuations.

From Airdrop Frenzy to Trust Crisis

The doubts about BERA mainly focus on the airdrop and token economic model. Previously, PANews had summarized the airdrop situation of Berachain (related reading: “Berachain Airdrop ‘Wealth Disparity’: NFT Holders Earned Up to $5.577 Million, While Testnet Users Only Received $60”), where the benefits of NFT holders and ordinary test users were vastly different, leading to a significant wealth gap.

In addition, although early VCs have not unlocked tokens, many users feel it is unfair that they can stake locked tokens to earn returns. Over 35% of the BERA tokens in BeraChain are allocated to private investors, raising concerns about centralization and fairness.

Afterwards, Smokey the Bera, the anonymous co-founder of Berachain, stated in an interview with Un Chained: “I don’t think the criticism is completely wrong. If we could do it all over again, and the team could start from scratch, we might not sell so much supply to VCs.”

In addition, a blogger named Ericonomic discovered that one of the co-founders of Berachain sold 200,000 tokens he received from an airdrop. The Berachain team did not respond to this.

As the enthusiasm for airdrops fades and the prices of tokens experience significant fluctuations, Berachain’s popularity on social media has also gradually diminished. A recent news report regarding a security incident in an ecological project has once again attracted considerable attention.

On March 15, the Berachain ecosystem’s platform Berally, which utilizes AI agents for social trading, announced a security issue: “Some information of the deployer’s key was leaked, resulting in the sell-off of all vesting tokens and withdrawal from the liquidity pool.” Fortunately, Berally’s official response was swift; a day later, they announced a token compensation plan of up to 120% and claimed to have locked the hacker through centralized exchanges.

Airdrop claim will soon end, liquidity experiment begins.

The airdrop claiming period for Berachain will end on March 20, and when the airdrop event completely concludes, whether Berachain continues to attract users through its PoL or creates a new growth curve through the rise of other ecological projects may be the key issue Berachain faces.

In the ecosystem, several key partners of Berachain have also made progress recently. Infrared, as the application with the most funds settled on Berachain, welcomed another $14 million in Series A funding on March 4, bringing the total funding amount to $18.75 million. From a product perspective, the staking product offered by Infrared has reached a maximum APR of 95.45%, which is indeed quite eye-catching in terms of this yield.

However, given that this high-yield trading pair is WBERA-HONEY, and considering the significant rises and falls of BERA, the more important aspect of this yield is its ability to withstand the fluctuations of the BERA token, which is what gives it practical significance.

In addition, several ecological partners such as Orderly, XrossRoad, and Moby have also made some new developments. However, in terms of significance, these new developments cannot be considered major progress. The main focus of the Berachain officials seems to still be on governance and establishing the PoL mechanism. As of March 18, the number of validators for Berachain is 60, and the PoL mechanism has not yet officially launched.

From the official statements made several times, there seems to be full confidence in the performance after the PoL launch. However, former NFT holders received massive airdrops, and then there are VCs with unblocked staking. The trust that the community has in Berachain may face a shortfall, and the only thing Berachain can do is to prove itself through PoL.

In the future, whether the PoL mechanism can be transformed into a true ecological moat, finding a balance between decentralized governance and user value distribution, will determine whether it can evolve from a “dark horse” to a “evergreen tree.” After the airdrop deadline on March 20, this experiment around liquidity may truly begin.