Revelo Roundtable #15 - Berachain & Monad

In this episode of Revelo Intel’s Twitter Spaces, which took place on May 30, 2024, Kirk hosted Smokey from Berachain and Intern from Monad to discuss the latest innovations in Layer 1 blockchain technologies, strategies for ecosystem development, and the future of decentralized protocols, and more! Read our notes below to learn more.

Background

Kirk (Host) – Head of Business Development at Revelo Intel

Smokey (Guest) – Co-Founder of Berachain

Intern (Guest) – Marketing at Monad

Berachain – an EVM-equivalent L1 built on the Cosmos SDK and powered by Proof of Liquidity

Monad – a layer-1 blockchain bringing parallel execution to the EVM

Spotlight on Berachain and Monad

Smokey introduces himself and mentions his initial career in biotech and healthcare. He transitioned to crypto around 2015-16, influenced by friends in the Bay Area. He experimented with crypto, especially during the 2017-2018 cycle. In 2019-2020, he delved deeper into DeFi, influenced by DCF God.
Smokey and his co-founder Papa Bear created NFTs of bears smoking weed, which led to the creation of Berachain. Berachain is an EVM-identical layer-1 blockchain using the Cosmos SDK, powered by proof of liquidity, allowing users to turn liquidity into security for the network.
Intern introduces himself, mentioning his college background in physics, economics, and math. He got into crypto in 2017 through a classmate trading coins. After meeting industry professionals, he joined CMS Holdings in 2020, working on the venture side.
Intern joined Monad in 2023, focusing on ecosystem growth, marketing, community initiatives, and venture coordination. Monad is a high-performance EVM-compatible layer-1 blockchain aiming to enhance scalability for DeFi and consumer applications.
Intern mentions the mutual respect between Berachain and Monad, despite both being EVM-compatible layer-1s. He highlights their collaborative spirit and appreciation for each other’s projects.

Berachain and Monad’s Innovations

Intern explains that Monad has four core optimizations, with parallel execution being one of them. He explains that parallel execution alone isn’t sufficient, but combined with a parallel database, asynchronous execution, and a high-performance consensus mechanism (Monad BFT), it significantly enhances performance. These optimizations allow Monad to open the design space for EVM, enabling applications that require high scalability and large concurrent users.
Smokey provides an overview of proof of liquidity, describing it as more of a consensus mechanism variant than a traditional one. He explains that proof of liquidity aligns liquidity and security by requiring users to provide liquidity to the ecosystem to earn governance and block rewards on Berachain. The key points include:
- Berachain has two main tokens: $BERA (the gas token) and $BGT (the non-transferable governance and rewards token).
- $BGT can only be earned by providing liquidity to the network, not purchased.
- Validators need $BGT delegated to them to produce block rewards.
- Users earn $BGT by providing liquidity to basic DeFi primitives like a DEX, a perps vault, and a stablecoin lending market.
- Validators direct block rewards/emissions towards different pools, creating an incentive structure for protocols and validators to collaborate.
- This collaboration allows protocols to bootstrap their own liquidity and directs emissions toward their pools or smart contracts.
Smokey says that proof of liquidity turns liquidity into security and provides stakeholders with economic incentives and control over the ecosystem, encouraging sustainable growth and usage of the network.
Smokey explains that $BGT can be burned one-way into $BERA. $BGT earns fees from network operations and a percentage of incentives from protocols. Users can either keep $BGT for governance and earnings or convert it to $BERA for liquidity, offering them optionality.

Why the Layer-1 Route?

Kirk asks why both teams chose to build L1 blockchains instead of L2s, given the current landscape.
Intern explains that Monad aims for high performance and decentralization, achievable by building an L1 from scratch. He highlights four core optimizations: parallel execution, a parallel database, asynchronous execution, and Monad BFT. These allow Monad to enhance throughput and lower fees. L2s inherit bottlenecks from Ethereum and have centralized sequencers, while Monad’s custom consensus mechanism can scale to thousands of nodes, ensuring decentralization.
Smokey says Berachain’s design, including proof of liquidity and validator-protocol interactions, is best suited for an L1. He emphasizes the importance of decentralization and validators’ ability to direct emissions toward the network. Building as an L1 provides flexibility in the stack and allows for a range of economic games. Berachain is working on scaling solutions, including layer twos, to handle applications with millions of users. This approach ensures EVM compatibility and adaptability, which would be harder to achieve with an L2.

Ecosystem Strategies Beyond Traditional Incentives

Intern explains that relying on grants for ecosystem growth is flawed because it undermines the long-term success of protocols. Monad focuses on supporting talented builders who are driven and have unique ideas that are only possible on Monad. This support includes advice, strategy, marketing, technical assistance, and venture connections. Monad also focuses on good marketing and strong community engagement to attract developers and create a positive association with the brand. Meeting deadlines, shipping products, and maintaining trust are also crucial.
Smokey agrees with Intern on many points, emphasizing the need to avoid looking like every other ecosystem. Berachain focuses on empowering builders through proof of liquidity, reducing friction, and increasing the quality of life for developers.
Smokey stresses the importance of not pigeonholing the ecosystem and encourages diverse applications beyond just DeFi. Berachain aims for interconnected applications that can collaborate and form synergies.

Monad’s Community and Berachain’s Testnet v2

Intern is excited about Monad’s community, which he believes is reaching unprecedented levels in the crypto space. He mentions the team’s efforts to create a fun and engaging community experience. Additionally, he looks forward to the upcoming Testnet, which will be the first time people interact with Monad. He talks about the importance of making the Testnet experience special and notes that they will be testing its limits to build a stronger network.
Smokey is enthusiastic about shipping the long-awaited Testnet v2 for Berachain, which will showcase proof of liquidity in full effect and improve scalability. He is also excited about the second batch of the Build Bera incubator, which includes high-quality teams and projects branching out into various categories like consumer, DePIN, and RWAs. Smokey looks forward to seeing these teams enter the public spotlight and begin fundraising, anticipating that their innovative projects will generate significant interest.

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Show Information

Medium: Twitter (Audio)
Show: Revelo Intel Twitter Space
Show Title: Revelo Roundtable #15 – Berachain & Monad
Show Date: May 30, 2024