PoL Next: Turning Emissions Into a Growth Engine
Proof of Liquidity (PoL) was built to make Berachain different.
Most chains spend emissions primarily to secure the network, subsidise activity, and bootstrap liquidity. That model can work early, but it often creates a one-way flow of value: emissions leave the protocol, activity is subsidised, and little durable value returns to the chain.
Berachain introduced a different model. PoL allowed emissions to be directed towards applications, liquidity, and ecosystem growth. Emissions became a productive balance-sheet tool rather than a passive cost.
PoL Next is the next step in that direction.
The objective is simple: Turn emissions from a sunk cost into a growth engine for Berachain.
What’s Changing
PoL Next introduces three major changes:
- Continued emissions discipline and higher capital efficiency
- Simplification of the token and staking model around staked wrapped BERA (sWBERA)
- Emissions Return Agreements (ERA): a curated emissions programme designed to turn emissions into positive-return growth capital
This builds on the recent reduction in annual BGT inflation from 8% to 5%, the ongoing reward vault realignment, and the introduction of protocol-level emissions routing.
1. Continued Emissions Discipline
The first step was making emissions leaner.
Recent PoL updates reduced annual BGT inflation from 8% to 5%, began consolidating low-utility reward vaults, and introduced dedicated emission streams for network-critical initiatives and chain-owned applications.
PoL Next continues this direction.
The goal is not simply to emit less. The goal is to make every emitted token work harder, increasingly flowing towards initiatives that can demonstrate one or more of the following:
- Revenue generation
- Demand for BERA and HONEY
- Sustainable user demand
- A credible path to returning more value than they receive
2. Simplifying the Token Model Around sWBERA
PoL has been powerful, but it has also been complex.
BGT, boost mechanics, validator allocation, reward vaults, incentives created a system that was highly differentiated but difficult for many users and institutions to understand.
PoL Next simplifies this model by consolidating value accrual around sWBERA.
The intended direction is:
- BGT and boost mechanics are phased out
- Emissions are paid in WBERA
- Reward vault stakers can claim rewards as sWBERA or native BERA
- Incentives, net of validator commission, are auctioned for BERA and accrued into sWBERA
- sWBERA becomes the primary value sink and staking path for BERA
This reduces friction across the system:
- For users, the mental model becomes simpler: stake BERA into sWBERA and participate in the economic upside of PoL
- For applications, integrations become easier: incentives and value accrual route through a clearer, more predictable staking layer
- For the protocol, value generated by PoL can be recycled back into BERA more directly
The objective is not only technical simplification. It is economic simplification: One token. One staking path. One primary value sink.
From BGT Theory to PoL Next
As outlined in the Honeypaper, BGT was introduced to align PoL stakeholders, primarily validators, applications, users, and BERA / BGT holders, so that emissions could be allocated more efficiently across the ecosystem.
The original goal was to create a decentralised market for emissions. Applications would compete for validator allocation, users would participate through productive vaults, and Berachain would benefit from deeper liquidity, more activity, and stronger ecosystem growth.
As the system evolved, it became clear that some fine-tuning and simplification were needed.
BGT was designed to be non-transferable, linking emission-routing power to active participation in Berachain’s success. However, the growth of BGT LSTs weakened that link by moving a meaningful share of BGT activity into intermediary layers. Combined with a limited number of ecosystem-aligned validator strategies, this skewed parts of the market toward short-term value accrual rather than long-term growth and durable value capture.
The result was a powerful market, but one that relied too heavily on intermediaries and became difficult for many users and businesses to understand.
PoL Next recognises these limitations and simplifies the system, while introducing ERA to better align long-term incentives across BERA, stakeholders, and businesses.
3. ERA: Emissions Return Agreements
The current incentive marketplace is effective at surfacing demand for emissions. Applications can fund incentives on reward vaults, validators allocate emissions, and users provide liquidity or activity.
However, the current model also has a limitation: the chain will almost definitionally receive less value back than it emits.
ERA formalises a new approach.
Under ERA, selected teams may receive dedicated emission streams based on their stage, traction, strategic importance, and ability to generate value for Berachain.
In exchange, participating teams would agree to return value to Berachain through a combination of:
- Fixed repayment over time
- Revenue share
- Demand for BERA and HONEY
The target structure is simple:
- Berachain provides emissions as growth capital
- The application uses those emissions to grow
- The application returns more value than it received
- Long-term revenue continues to accrue back to the Berachain ecosystem
Example ERA Structure
A team applies to ERA because it wants to access predictable growth capital without immediately diluting ownership through an equity raise.
For example, the team receives $500,000 worth of emissions over 12 months.
Over the following 6–12 months, the team repays $600,000+ through a combination of fixed return and revenue share.
After the repayment threshold is reached, the team continues to share a percentage of future revenue with Berachain.
For businesses, ERA creates a structured financing path without immediately diluting ownership, while aligning their success with Berachain’s long-term economic upside.
PoL Next accepts more underwriting complexity and longer duration in exchange for better-aligned teams, higher-quality growth, and compounding revenue streams back to the Berachain ecosystem.
Why This Matters for BERA
PoL Next is designed to make BERA the direct beneficiary of a more efficient emissions system.
Today, emissions are primarily used to support network activity and application growth.
With PoL Next, the objective is to make that growth increasingly reflexive:
- Emissions support high-potential businesses
- Businesses generate revenue and network activity
- A portion of that revenue returns to Berachain
- Returned value accrues through BERA and sWBERA
- Stronger BERA economics improve the system’s ability to fund further growth
This creates a clearer loop:
More productive emissions → stronger business growth → more ecosystem revenue → greater value accrual to BERA → increased capacity to fund future growth.
This is the long-term purpose of PoL Next.
Stakeholder Impact
BERA Holders
PoL Next is intended to improve long-term value accrual to BERA by making emissions more efficient, reducing unnecessary dilution, and routing returned value through the BERA staking layer.
As emissions move from passive subsidy to productive growth capital, BERA becomes more directly linked to the economic performance of the Berachain ecosystem.
sWBERA Stakers
sWBERA becomes the primary destination for PoL-related value accrual.
PoL incentives are auctioned for BERA and accrue through sWBERA. All incentive derived yield which currently flows to BGT will accrue to sWBERA.
Users no longer have to deal with BGT, boost, or PoL-specific governance mechanics to participate in the system’s upside.
BGT Holders
BGT is deprecated as a user-facing asset in Proof of Liquidity.
After PoL Next, BGT no longer affects validator reward allocation weight, block rewards, or governance. The Hub UI will support users in redeeming BGT as part of the migration path.
Residual BGT associated with existing vaults is expected to be settled automatically. Any remaining BGT allowance on a vault from before the upgrade is converted to WBERA on the next claim from that vault, with no vault-owner action required.
For BGT LST holders, Berachain is coordinating with BGT LST protocols to support a smooth path towards redeeming their underlying BGT and migrating through the PoL Next transition.
In practical terms, the role previously played by BGT is being absorbed into a simpler model centred on BERA emissions, reward vaults, and sWBERA value accrual.
Governance
PoL Next intends to further decentralize Berachain governance by removing the concentration issues created by liquid BGT wrappers.
Governance will be assigned to sWBERA, aligning governance power with the primary BERA staking and value-accrual asset.
Validators
Validators remain important participants in Berachain’s economic system, but the removal of BGT and boost mechanics simplifies the allocation model.
The boost curve is removed. Per-block emissions remain split into a baseRate to the validator operator and a rewardRate to the distributor for Reward Vaults. Emissions no longer scale with boosted BGT.
Businesses
Businesses will have two main ways to access PoL emissions:
- The standard incentive marketplace, where teams fund incentives on reward vaults to compete for validator allocation. This is expected to continue until enough high-quality ERA teams are onboarded, at which point the incentive marketplace will be deprecated
- ERA-style agreements, where selected businesses receive more predictable emissions in exchange for clearer value return commitments
Users and LPs
Users should benefit from a simpler model.
Instead of needing to understand BGT, boost and multiple wrappers, the core path becomes easier: participate through productive vaults and/or stake BERA into sWBERA.
The user-facing result should be a clearer PoL experience: fewer token mechanics, fewer abstractions, and a more direct connection between ecosystem growth and BERA value accrual.
Migration Path
| User / Actor | Expected Action |
|---|---|
| BGT holders | Redeem BGT directly or migrate through the Hub UI |
| Reward vault stakers | No action needed. Continue using eligible reward vaults. Rewards will shift to BERA and be claimable as either BERA or sWBERA |
| Vault owners | No action needed. Existing vaults do not require owner-side migration |
| Validators | Per-block emissions will become fixed, and boost mechanics will be removed. Validators should prepare for the new fixed baseRate / rewardRate model |
| Integrators | Update integrations to remove dependencies on BGT LSTs, boost dynamics, and BGT-based reward assumptions |
Technical Reference
For a more technical breakdown of the changes see the PoL Next technical changelog:
What’s New - May 2026 PoL Next
The page includes details on BGT deprecation, BERA emissions, reward vault claim flows, incentive auction routing, sWBERA accrual, residual BGT settlement, staking pool updates, contract interface changes, and GraphQL field updates.
Security Review
PoL Next has undergone two independent audit processes, one by Spearbit and one by Zenith. Both reports can be found here:
Full code can be found here.
Implementation Timeline
PoL Next is expected to roll out in two phases:
| Milestone | Target Date | Scope |
|---|---|---|
| Bepolia upgrade | 27 May 2026 | Testnet deployment and integration testing |
| Mainnet upgrade | Second half of June 2026 | Target mainnet activation date |
The Bepolia upgrade will be used to validate the new PoL mechanics, integrations, reward vault behaviour, claim flows, incentive auction routing, sWBERA accrual, and downstream application dependencies before mainnet activation.
The mainnet upgrade is currently targeted for the second half of June 2026, subject to successful testing, integration readiness, and final governance / operational approval.
What Comes Next
Further details will be shared on:
- BGT and boost phase-out timeline
- Migration path for existing BGT holders and related products
- Full ERA playbook and first cohort kick off
The direction is intentional.
PoL started as a mechanism to align validators, applications, and liquidity.
PoL Next turns that mechanism into a growth engine for Berachain.
Emissions should not be a permanent cost centre. They should become productive capital.
More updates soon.
Appendix: Impact Analysis
This appendix summarises the expected impact of PoL Next across different selected areas:
- BGT LST concentration and incentive-market crowding
- sWBERA yield simulation
The analysis is directional and based on third party and publicly available data and current assumptions as of May 20, 2026, is subject to change, may not be accurate or complete, is provided for information purposes only and should not be relied on. It should be read as an impact assessment, not a final forecast. We undertake no obligation to update any of the information in this post or appendix whether as a result of new information, future developments or otherwise.
Summary of results
PoL Next reduces incentive-market inefficiency, removes BGT-specific complexity, and consolidates value accrual into sWBERA.
1. BGT LST Concentration and Incentive-Market Crowding
The earlier section, From BGT Theory to PoL Next, explains the design intent behind BGT: emission-routing power was meant to remain tied to active participation in PoL. This appendix quantifies where that design drifted, as BGT exposure, boost, and incentive flow became concentrated through LST and delegation layers.
The effect is visible across three layers: BGT wrapped into LSTs, that exposure translated into validator boost, and the resulting emissions routed through a LST-related reward vaults.
1.1 BGT and Boost Concentration
The biggest BGT LSTs, Infrared’s iBGT, LBGT, and stBGT, wrap most of the circulating BGT supply, and contribute most of the active boost.
| Asset | BGT supply | % of BGT | Active boost | % of boost |
|---|---|---|---|---|
| iBGT | 9.10M | 60.5% | 9.00M | 67.8% |
| LBGT | 0.96M | 6.4% | ~0.96M | ~7.3% |
| stBGT | 0.12M | 0.8% | ~0.12M | ~0.9% |
| All LSTs | 10.19M | ~68% | ~10.09M | ~76% |
| Network total | 15.04M | 100% | 13.27M | 100% |
LSTs’ share of active boost (~76%) exceeds their share of supply (~68%) because non-LST BGT also includes idle and unboosted balances.
Because BGT delegated through an LST is automatically boosted to the LST’s preferred validator set, concentration carries directly into emissions. Infrared validators rank in the top tier by stake and boost and emit at higher BGT-per-block rates. In a representative 7-day window across top boosters, Infrared captured 73% of booster-side incentive flow, materially above its 61% BGT share. The gap between BGT control and incentive capture is the empirical signature of LST concentration: the wrapper does not only aggregate BGT, it preferentially routes it to higher-emission validators.
1.2 LST Crowding in the Incentive Market
The concentration translates directly into the booster-side incentive flow:
| Incentives | Weekly | Annualised |
|---|---|---|
| Network booster pot | ~$43k | ~$2.25M |
| Routed via the dominant LST (~73%) | ~$32k | ~$1.65M |
This is the crowding effect. Applications fund incentives in the open market to attract emissions, but the majority of those incentives end up flowing through the same LST that controls the marginal boost decision. Because a single wrapper applies one allocation strategy across many validators, the incentive market no longer fully expresses application-by-application competition, it also clears against the structural demand for the wrapper itself.
The dynamic is self-reinforcing: the more BGT routes through an LST, the more incentive flow it captures, the more attractive holding the wrapper becomes, and the more BGT funnels back in. Over time this dampens the price discovery the incentive market was designed to provide, marginal clearing rates are set partly by one intermediary’s allocation strategy, rather than by application-side demand alone.
1.3 Fulfilling the Original Goal
PoL Next removes the control surface that makes this loop possible. With BGT and boost phased out, emissions no longer depend on LST-controlled delegation, and no intermediary can route a supermajority of BGT to a preferred validator set or tax the resulting incentive flow on the way through. Applications compete more directly on incentive efficiency, users participate through sWBERA without wrapper-specific mechanics, and value accrual routes back to BERA more directly.
2. sWBERA Yield Simulation
The model estimates sWBERA APY at different levels of BGT conversion into staked BERA. Annual Percentage Yield (APY) data is provided from third party and publicly available information, is subject to change, may not be accurate or complete and may not reflect actual earnings but rather the general network yields estimated to be applicable to all relevant network participants based on current conditions of the network, which may change. Presented rates are retrospective in nature and there is no guarantee that historic rates will represent current or future rates. APY data is provided for informational purposes only and should not be relied on.
| BGT Conversion | sWBERA APY | Multiple vs Current Yield |
|---|---|---|
| 0% | 23.14% | 3.84Ă— |
| 25% | 21.06% | 3.49Ă— |
| 50% | 19.32% | 3.20Ă— |
| 75% | 17.84% | 2.96Ă— |
| 100% | 16.58% | 2.75Ă— |
| 184% / +97.6M BERA | 6.03% | 1.00Ă— |
Interpretation: the lower the BGT conversion into sWBERA, the higher the APY. As more BGT exposure converts into staked BERA, the yield normalises.