This page is for information purposes only. Certain services and features may not be available in your jurisdiction.

How does Berachain work? A look at its three-token model

Berachain operates as an Ethereum Virtual Machine (EVM)-compatible Layer 1 blockchain built on the Cosmos SDK, combining the best of both worlds to deliver a scalable, interoperable, and developer-friendly platform. At its core, Berachain leverages EVM compatibility to allow developers to seamlessly port Ethereum-based decentralized applications (dApps) and smart contracts onto its network. This ensures a smooth transition for developers while maintaining access to Ethereum’s robust tooling and ecosystem.

How does Berachain work?

Berachain uses a three token model as follows:

  • BERA: The primary token used for gas fees and transactions.

  • BGT: The governance token used for staking and participating in the network's consensus. BGT cannot be bought on exchanges and can only be earned by participating in network security. Engage directly in the governance of BGT, leverage BGT Station for innovative bribe mechanisms, enhancing participation.

  • HONEY: A stablecoin that's integral to the Berachain ecosystem. Utilize HONEY for seamless trading, ensuring value consistency.

What are the benefits of Berachain’s three-token model?

Berachain’s tri-token model may be an advantage over blockchains like Ethereum — where the same cryptocurrency is used for gas fees and staking.

The more ETH is staked, the lower the total supply of ETH available and the higher the cost of ETH. This means that paying gas fees on transactions is more expensive!

Berachain was designed specifically to solve this problem. Because BERA and BGT are separate tokens, staked cryptocurrency does not impact the total supply of cryptocurrency available for transactions.

With Berachain’s unique tri-token model, users can stake cryptocurrency and contribute to the security of the network without raising gas fees!

Proof of Liquidity Consensus Model

To better understand Proof of Stake and Proof of Liquidity, let’s break down the difference between the two consensus mechanisms.

  • Proof of Stake (PoS)

    : Proof of stake chains like Ethereum allow validators to earn ETH by staking directly with the blockchain. Existing holders of ETH will continue to earn more ETH — which could lead to Ethereum becoming more centralized over time!

  • Proof of Liquidity (PoL)

    : Proof of liquidity chains like Berachain allow participants to provide liquidity. In return, liquidity providers are rewarded with BGT. This setup allows more liquidity for the Berachain ecosystem and less centralization risk!

In the future, decentralized applications built on Berachain will be able to create liquidity pools to contribute to network security. That means independent developers have the opportunity to receive funds from validators and chare apps across the Berachain ecosystem.

Disclaimer
This article may cover content on products that are not available in your region. It is provided for general informational purposes only, no responsibility or liability is accepted for any errors of fact or omission expressed herein. It represents the personal views of the author(s) and it does not represent the views of OKX TR. It is not intended to provide advice of any kind, including but not limited to: (i) investment advice or an investment recommendation; (ii) an offer or solicitation to buy, sell, or hold digital assets, or (iii) financial, accounting, legal, or tax advice. Digital asset holdings, including stable-coins, involve a high degree of risk, can fluctuate greatly, and can even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition. Please consult your legal/tax/investment professional for questions about your specific circumstances.

© 2025 OKX TR. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or less of this article may be used, provided such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state:"This article is © 2025 OKX TR and is used with permission." Permitted excerpts must cite to the name of the article and include attribution, for example "Article Name, [author name if applicable], © 2025 OKX TR." No derivative works or other uses of this article are permitted.

Related articles

View more
DeFi Nedir Mid
Trending token
Altcoin

Giveaway & Airdrop Roundup: Hedra, Sonic, Theoriq and more

Looking to earn free tokens and discover the hottest projects in Web3? This week’s OKX Wallet roundup brings you a mix of cutting-edge AI platforms, lightning-fast L1s, and real-world asset tokenization plays — all offering rewards through airdrops, giveaways, or both. Stay ahead of the curve and maximize your chances by completing tasks early using your OKX Wallet.
May 23, 2025
how to buy the right crypto token for you
How to buy crypto

How to Buy Crypto Beginner Guide: What Coin Should You Buy Based on Your Needs?

When deciding how to buy crypto, it’s essential to consider your personal needs and goals. Here are some tips for beginners who want to know what to consider when choosing a coin and buying crypto. What to look for when buying crypto
Mar 10, 2025
Pi Network learn
Altcoin

When will PI launch and be available for trading on OKX?

Pi Network's Mainnet launch is set to happen on 28 February 2025, while OKX will be listing Pi Network on their platform in mid February 2025. The mainnet's imminent launch will enable users to transfer and trade their PI onchain. In this quick guide, we'll walk through essential queries like Pi Network's official launch date, the various Pi Network phases and when the network is likely going live.
Feb 14, 2025
Beginners
25
pi coin
Altcoin

How to sell Pi coin when it is listed

As Pi Network continues to grow and gain attention in the crypto world, many users are eager to know how they can trade their mined PI. While the Pi Network token generation event has sparked interest, the token is not yet officially listed on OKX. Once listed, selling your PI on OKX will be simple and seamless if you're familiar with how trading on OKX works. If you're new and are worried about the steps involved, here’s a step-by-step guide to help you prepare for trading Pi Coin on OKX.
Apr 4, 2025
Beginners
15
thumbnail:melania-trump-lanca-nfts-elon-musk-anuncia-suporte-para-doge-pela-tesla
Memecoins

Melania Trump launches her own coin, $MELANIA, following TRUMP

When did $MELANIA coin launch? On 19 January 19, 2025, Melania Trump, First Lady to President-elect Donald Trump, launched her own meme coin, $MELANIA, on the Solana blockchain. The launch of $MELANIA happened just one day after Trump introduced his $TRUMP coin.
Apr 2, 2025
trump coin meme
Memecoins

Trump Coin Takes Center Stage: The Political Memecoin Everyone’s Talking About

Donald Trump announced on his official X account that he has launched personal memecoin $TRUMP on 18 Jan 2025. With its listing, Trump Coin has quickly become a trending topic, blending the world of politics and blockchain into an intriguing narrative.
Feb 27, 2025
Beginners
View more