Berachain has unveiled a new proposal for upgrading the Proof of Liquidity model aimed at reallocating incentives to support the BERA token.
Overview of the Proposal
A proposal has been shared on the Berachain mainnet's public forum regarding a new Proof of Liquidity model called "PoL v2." The proposal suggests redirecting 33% of the current incentives into a new rewards model to support liquidity of the BERA token.
New Reward Mechanisms
According to the proposal, this model will create a native income source for BERA holders, thereby driving demand and utility for the token. "This establishes a protocol-level yield source for BERA holders, without displacing existing stakeholders," stated Berachain co-founder, Smokey the Bera. The model also implements a seven-day unbonding period for staked BERA, aiming to reduce arbitrage activities.
Market Reaction and Community Response
Following the commencement of the proposal, BERA token experienced a sharp spike in value, reaching $2.25. However, it quickly corrected back to the $2.00 - $2.10 range. Despite the initial surge, BERA's trading volume increased by 315.10% over the past 24 hours, indicating renewed interest among traders.
The proposal to upgrade the Proof of Liquidity model is currently under discussion within the Berachain community. If approved, it could significantly impact the future development of the BERA token and its liquidity.
