Berachain ties L1 security to DeFi liquidity, and that makes treasury design existential

Berachain is an EVM-identical Layer 1 built around Proof-of-Liquidity (PoL), where the chain’s “security token” and its “rewards and governance token” are deliberately split. That split is the whole bet. It tries to keep the base asset (BERA) focused on gas and validator bonding, while routing the growth budget through a separate token (BGT) that is earned only through productive onchain activity.

Mechanically, the design pushes a treasury-like function into the protocol itself. Instead of paying validators in the gas token and hoping a grants program bootstraps activity, Berachain emits BGT on block production and lets validators route most of that emission to governance-whitelisted reward vaults that sit on top of real liquidity and real app activity.

The Treasury Risk Manager takeaway is simple. This token system can survive with mediocre narrative and still work if (1) emissions are credibly constrained, (2) reserve spend is rule-bound, and (3) fee flows are hard to capture by insiders-i.e., the same token economy components that usually determine whether “incentives” become permanent overhang. If any of those three slip, PoL starts to look like subsidized TVL with a more complicated control surface.

BERA is gas and validator bond, with a built-in burn that competes against supply expansion

BERA is the chain’s native gas token and the asset validators stake to participate in consensus, as defined in the native token docs.

Two supply forces matter more than price charts.

First, fees are destructive. Berachain’s docs state that tokens used for transaction fees are burned, removing them from circulating supply.

Second, Berachain’s design allows BGT to be redeemed (burned) 1:1 into BERA, and BERA cannot be converted back into BGT. That one-way bridge matters because it creates a persistent “exit valve” from governance power into the liquid gas asset.

Put those together and you get a supply profile that is not cleanly capped. CoinGecko reports Max Supply: ∞, and it also reports live supply figures that reflect onchain issuance minus burned tokens.

As of March 3, 2026, CoinGecko shows Circulating Supply: 228,513,589 BERA and Total Supply: 533,998,092 BERA.

That delta between circulating and total is where treasury risk lives. It is the “overhang” a market must continuously re-underwrite, and it is the easiest place for policy to change without a hard fork.

BGT is the emissions engine, and it is intentionally hard to buy

BGT is Berachain’s governance and rewards token. It is non-transferable and “can only be acquired by engaging in productive activities” inside the ecosystem, typically by staking PoL-eligible receipt tokens in governance-whitelisted reward vaults.

That single constraint does a lot of work. It reduces pure capital-market capture of governance and forces governance weight to be, at least initially, a function of providing liquidity and using applications.

Now the flip side. If you want to fund growth, you still need a control plane for emissions. On Berachain that control plane is validator routing plus onchain governance gating.

When a validator produces a block, BGT is emitted through two components: a fixed base emission paid to the block producer, and a variable reward-vault emission that depends on the validator’s boost.

Boost itself is defined as the validator’s share of total BGT delegated across the network. Higher boost increases emissions, subject to the protocol’s emission formula and caps.

Validator emission routing is configured through BeraChef. The docs describe three key BeraChef responsibilities: reward allocations (which vaults get what share), validator commission on incentive tokens, and vault whitelisting.

Two guardrails are worth calling out because they are explicit, measurable, and directly tied to extraction risk:

1) Reward allocation changes are delayed. The docs state validators control allocations subject to a delay of 450 blocks, and if they do not update their “cutting board” within 302,400 blocks (approximately 7 days), the baseline cutting board begins to apply.

2) Incentive commissions are capped. The docs list a default commission of 5% and a maximum commission hard cap of 20%.

Fiscal flows: where fees go, who earns them, and what gets auctioned

Berachain’s token design is less about “utility bullets” and more about who receives cashflows under which onchain actions.

1) Gas fees: paid in BERA, with burning described in Berachain’s token docs.

2) Core dApp fees: Berachain’s docs state that if you boost validators with BGT, you earn a share of fees from core dApps (named as BEX and HoneySwap). Those fees are handled via a FeeCollector contract that auctions fees for WBERA and distributes them pro rata to BGT holders who boosted validators.

3) Protocol “incentives” paid by apps: This is the incentive marketplace. Protocols can bid for validator BGT emissions by offering whitelisted incentive tokens to their reward vault, and the docs state a protocol can offer up to two incentive tokens per vault.

When BGT emissions are directed to the vault, incentives are distributed with (a) a validator operator commission and (b) the remainder going to boosters, with proofs updated every 24 hours and eligibility that “never expires” per the docs.

Importantly for spend discipline, the docs state the offered amount cannot be withdrawn or revoked.

4) Automatic redirection to BERA stakers: A portion of protocol incentives is automatically redirected during incentive distribution. The docs specify 33% is redirected, auctioned for WBERA, and distributed to BERA stakers. Validators receive the remaining 67% of incentives.

5) HONEY mint and redeem fees: HONEY is Berachain’s fully collateralized, soft-pegged stablecoin. It can be minted by depositing whitelisted collateral into vaults through HoneySwap, and the docs state minting rates are configurable by BGT governance per collateral asset.

HONEY’s docs also specify a fee schedule where BGT holders receive fees collected from minting and redeeming HONEY, and the page enumerates mint and redeem fees by collateral asset. For a contrast case in stablecoin fee design, see our GUSD tokenomics review.

HONEY includes a “basket mode” safety mechanism that activates when any collateral asset depegs, changing redemption behavior into a pro rata basket redemption across collateral assets.

Distribution, unlock overhang, and who holds the discretionary budget

Berachain’s mainnet launch date is stated as February 6, 2025 in third-party summaries.

The same summaries state BERA total supply at mainnet launch was 500,000,000, and they also state the token does not have a fixed maximum supply because new tokens can be created through redemption of BGT and because staking rewards are funded by a fixed annual inflation rate.

From a treasury risk standpoint, two things matter more than the headline numbers.

First, allocation categories imply control. Even “community” buckets often resolve into a foundation-controlled runway in practice. Third-party summaries describe a treasury primarily controlled by the BGT Foundation and a 5-of-9 multisig guardian council, intended for ecosystem development, grants, and operational expenses.

Second, unlock and spend policy is where dilution becomes real. The market can handle large reserves if their release is rule-bound, slow, and auditable. It struggles when reserves are discretionary and release is politically negotiated.

The airdrop itself was disclosed as 15.75% of supply in an official overview post dated February 5, 2025, including a breakdown of eligibility categories and amounts.

Separately, reward-vault inclusion is not purely “permissionless.” The governance docs state that while anyone can create a reward vault, it must be whitelisted through governance proposals to receive BGT emissions. The same page describes a gating process involving an RFRV form and posting on the governance forum, and notes proposals are reviewed weekly by the BGT Foundation and Guardians.

That last point is where treasury and emissions merge. If you can influence what gets whitelisted, you can influence where BGT emissions go. That is effectively budget setting.

Risk register: what breaks first

Berachain’s PoL design is coherent. The fragility is not in the abstract mechanism. It is in governance, reserve release discipline, and reliance on marketplaces that can be gamed.

Top 3 risks

  1. Governance capture of emissions routing, Trigger: a small set of actors accumulates enough BGT influence to dominate reward-vault whitelisting and validator boost patterns. Mechanism: whitelisting gates which vaults can receive emissions, and validators route emissions via BeraChef allocations, so capture concentrates the growth budget into favored venues. Who bears it: BERA holders (through weaker long-term demand for gas), honest LPs (through lower real yield quality), and builders outside the favored set. Indicators: increasing concentration of BGT boost among few validators (boost share), fewer unique whitelisted vaults receiving most emissions, and rising share of incentives captured by a small validator set.

  2. Incentive marketplace extraction and yield illusion, Trigger: protocols bid aggressively for emissions using low-quality incentive tokens, or validators steer emissions toward the highest nominal bid regardless of sustainability. Mechanism: incentive rates cannot be reduced while incentives remain active, and offered incentive amounts cannot be withdrawn or revoked, which encourages short bursts of high spend and then cliff-like drop-offs. Who bears it: LPs and BGT boosters who anchor positions around transient incentives, and ultimately the chain if liquidity is mercenary. Indicators: large swings in incentive rates, rapid churn in the top reward vaults by emissions, and falling “real fees” relative to incentive payouts.

  3. HONEY collateral and depeg event complexity, Trigger: any whitelisted collateral depegs materially. Mechanism: basket mode activates when any collateral asset depegs, forcing proportional redemption across the basket, which can propagate stress from one collateral asset to all redeemers. Who bears it: HONEY holders and collateral vault users, and secondarily BGT fee recipients if mint/redeem activity collapses. Indicators: basket mode activation events, widening secondary-market deviations for HONEY, and rising concentration in a single collateral type.

Dominant risk: discretionary treasury and unlock overhang becoming the de facto “monetary policy”

The core structural uncertainty in BERA is not whether PoL can attract liquidity. It can, especially early. The question is whether Berachain can keep the long-run monetary and fiscal stance legible once the easy growth phase ends.

Three mechanics interact in a way that can quietly turn “ecosystem funding” into chronic dilution.

First, the supply ceiling is not hard. Third-party summaries explicitly state the token does not have a fixed maximum supply and point to BGT redemption and an inflation model tied to staking rewards.

Second, Berachain explicitly routes value to two stakeholder groups that can become politically powerful: BGT boosters and BERA stakers. BGT boosters receive core dApp fees via FeeCollector auctions, and BERA stakers receive an automatic 33% redirection of protocol incentives that is auctioned for WBERA.

This is good alignment when revenues are real. It becomes a governance hazard when revenues are not real and incentives are doing all the work. In that environment, stakeholders rationally lobby for higher emissions, looser whitelisting, or more aggressive incentive bidding because their near-term yield is propped up by protocol-directed value flows. The cost shows up later as weaker BERA demand and a larger circulating-supply overhang.

Third, the human control layer is still meaningful. Reward vault whitelisting is governance-mediated, and the docs describe a weekly review process by the BGT Foundation and Guardians. Third-party summaries also describe a treasury primarily controlled by the BGT Foundation and a 5-of-9 guardian multisig, intended for grants and ops, with a plan to transition to more decentralized management later.

In treasury terms, that is a classic interim-risk window. A large budget plus discretionary execution plus evolving governance is where spend discipline usually fails. Not because of malice. Because every ecosystem “needs” funding, and the easiest funding source is the token itself.

The measurable version of this dominant risk is not vibes. We track similar patterns in our crypto research reports. Watch these:

1) The slope of total supply versus burned supply, alongside BGT->BERA redemption intensity.

2) The composition of “yield” paid to participants. If incentive tokens dominate while fees remain low, you are looking at subsidy, not product-market fit. Fee flows to BGT boosters and BGT fee capture on HONEY mint/redeem are at least explicit in docs, which makes them auditable.

3) Governance throughput and concentration. If whitelisting outcomes, cutting-board baselines, and commission settings converge around a small cluster of validators and affiliated vaults, the “marketplace” becomes an oligopoly. Berachain’s own guardrails here are real, like the 20% commission cap and allocation delays, but they do not eliminate capture.

If you are advising a team integrating with PoL or structuring an emissions-and-fees policy, treat this as a budget system first and a token system second. If you need support designing those constraints, our tokenomics design services can help. Tokenomics consulting in this ecosystem is mostly about preventing well-intentioned incentive spend from turning into permanent overhang.



This article is part of our Tokenomics Deep Dive series.