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BERACHAIN 101 - The autistic cult
This is the first thread in a series of threads about @berachain, an L1 that is going to be launched in a few months.
Get ready to dive into the depths of the most redacted cult and with the biggest ponzinomics of recent years.
📚

This series of threads will be structured as follows:
> 101: what is Berachain and why you should pay attention to it
> 102: how to opt for its airdrop
> 103: composition of its ecosystem and how to expose yourself to it early
Let's get to it.

Before starting, I want to warn that the information about Berachain is very scarce, highly segregated, and not publicly available in official sources, so there could be incorrect data or data that changes over time.
I have tried to put it all together in a simple way.

1️⃣ History
The story begins in August 2021 when 2 investors of OHM ( @itsdevbear and @SmokeyTheBera, the current cult leader) decided to create a collection of high bear NFTs, the Bong Bears.
The minting was for 107 units at a price of 0.069420 ETH (approximately $225).

To put it in context, these bears are now worth ~57 ETH ($125k).
In next threads I'll deep more into them, explain why they are valued at that amount and what they'll be used for.
Following this collection the idea emerged for some OHM investors to create Berachain.

The funny part of this is that until April there was no official confirmation that Berachain was real; it was all speculation.
Even the team members denied it and called it a scam, fakechain and similar names.
But in April something happened that would change everything.

2️⃣ What is BERACHAIN
Berachain is an EVM-compatible L1 built with Cosmos SDK and with a consensus algorithm called Proof of Liquidity.
It has not been released yet, but its launch is expected in Q1-Q2 of 2024 (according to the SAFT, June is the deadline for it).

Berachain will function as an L1 with its own native DEX with real yield.
The block rewards, like in other L1s, will be distributed among those who stake tokens to secure the network, but here fees from the DEX and other types of rewards will also be distributed.

3️⃣ Proof of Liquidity
It's a consensus mechanism (similar to PoS/LPoS/DPoS) specifically developed for Berachain.
In other PoS systems, the token you can stake natively is the native token of the ecosystem: you stake ETH and receive ETH for securing the network.

With Proof of Liquidity, it's different. In PoL there will be a series of external assets that you can stake natively and that will in turn generate yields for you.
It's not known which assets will be, but they'll likely include tokens such as wBTC, ETH, and various stablecoins.

4️⃣ Token Mechanism
Berachain will have a system of 3 native tokens instead of 1:
>$BERA: the token used to pay for gas ("the main one")
>$BGT: the one used for governance and to obtain rewards (non-transferable)
>$HONEY: the ecosystem's stablecoin

$BERA
With it you'll pay for gas, and all the gas will be burned. If you stake it, you'll receive $BGT.
There are two ways to acquire it:
>Purchasing it
>Staking any allowed asset (wBTC, ETH, stablecoins...) to earn block rewards.

$BGT
A non-transferable governance token. It will also be used to obtain real yield from Berachain (DEX fees, funding rates, interests from $HONEY, etc.).
It can only be obtained by staking $BERA.

$HONEY
The native collateralized stablecoin of the ecosystem.
It will be mintable by taking collateralized loans with assets used for staking, with certain NFTs, and in many more ways.

External Assets (wBTC, ETH, stablecoins)
The incentive for staking them is primarily to earn $BERA from block rewards and to take out loans in $HONEY.

5️⃣ The Ponzi
Berachain is often mentioned as a Ponzi scheme and the reason is clear: its goal is to convince you to put assets into the ecosystem and never withdraw them.
After all, if your liquidity is working and there's a native DEX, why would you need to take it out?

If everything works as intended it could be the perfect system.
The problem could arise if there's a massive withdrawal of assets from their ecosystem, leaving $HONEY under-collateralized.
However, they have implemented various mechanisms to ensure this doesn't happen.

6️⃣The Cult
Berachain shows many typical characteristics of a cult:
>Charismatic Leader: @SmokeyTheBera perfectly fits this role. He's the god of Berachain and his word is taken as gospel.
>Unique Language: they have invented peculiar words for communication among themselves.

>Promises: They believe that Berachain will be the greatest ever.
>Distinctive Culture: They have developed a very characteristic culture.
This is very bullish: these are people who will hold until death and will try to convince everyone else to do the same.
Cult > Community

Although I must also say that most people follow along with the joke for laughs.
The question is, how many will actually take it seriously? How many retail investors will end up truly believing in it and even getting a bear tattooed on their chest?
My bet is that many will.

7️⃣ Team
One of the aspects that is both liked and disliked is that its team isn't doxxed.
This is bad because they could pull a rug pull "without consequences," but it's also good because they've raised a lot of money from VCs and other professional investors.

The most well-known are its co-founders: @itsdevbear and @SmokeyTheBera.
They often attend conferences and give talks wearing bear masks.
The rest of the team is somewhat more known, but these two are the main focus.

8️⃣ Valuation
Despite not being doxxed, in April they managed to close a funding round of $42M at a FDV of $420M.
This round was led by @polychain and included other well-known VCs such as @robotventures and @shimacapital.
But a lot has happened since then.

And that valuation is no longer realistic.
The latest valuations being discussed OTC are around $1.3B FDV, which is 3 times more than in that round.
When it launches, the price could easily be around $3-4B FDV.
Remember this number because it's important.

9️⃣ Why I'm Bullish
It's well known by most crypto investors that the valuations of web3 projects are mostly based on narrative speculation.
If a token is on everyone's lips, it's much more likely that its value will appreciate.

And, undoubtedly, one of the best ways to gain visibility is through its community.
The more loyal and cult-like a community is, the more viral it becomes.
Berachain is the perfect example of this: they have the most loyal and cult-like community in recent years.

This, combined with the fact that its architecture resembles a super Ponzi with elements of speculation and strategy, leads me to believe that it will be one of the leaders in the next bull run.
However, remember that Ponzis often rise step by step but crash like an elevator.

[ E N D ]
In the next thread I'll talk about different ways to get exposure to Berachain's airdrop (none are confirmed yet).
There's one in particular that few people know about, and I believe it could be especially relevant.
Here's a hint:discord.gg