Governance is evolving on Berachain as the network scales, with new updates designed to strengthen the foundation of Proof of Liquidity and ensure that emissions flow toward tokens, vaults, and incentives that truly add value to the ecosystem.

This update introduces new standards for RFRV submissions, adds clarity around token and incentive eligibility, and sets the stage for a more robust and ecosystem-aligned PoL experience.

New Standards for Staking Tokens and Protocols

To drive transparency and avoid potentially extractive or opaque token setups, all staking tokens will be held to the following standards. It’s expected that standards will evolve over time as the governance function expands, and both positive game-theory and value extractors become more creative. For the foreseeable future the following guidelines will be used to evaluate reward vault eligibility, with the goal of enabling as many high quality teams as possible to tap into Proof of Liquidity. 

Here’s the breakdown:

Distribution & Control

• Independent Holders: The staking token should have at least 100 holders. Token distribution must be broad and not clustered among related addresses or entities. 
• No Overdominance: No single holder may have more than 40% of the receipt token staked into the rewards vault, and all holders above 20% of an LP must be identified.

Accessibility & Transparency

• Open Access: The staking token must be accessible to everyone. There should be no special permissions or barriers to using it. Special exceptions may exist, such as permissioned or compliance specific applications, in the case of certain RWAs.
• The staking token must be a standard ERC20 token
• Rebasing Staking tokens should use a wrapper (this is irrelevant in the case of tokens with a rebasing rate of 0%, e.g. OHM)
• Verified Contract: The token’s smart contract must be verified on the blockchain, and can be checked on tools like Berascan.
• Audits: The protocol submitting should have at least one audit and no recent exploits. If an exploit happened, the proposer must show demonstrable evidence that the issue was fixed.

Activity & Design

• Liquidity: The staking token should have at least $100,000 in TVL. If it is a DEX pool, it should have at least $50,000 TVL in a major asset, like BERA or HONEY. Other major assets like wBTC, wETH, or correlated asset pairs are also potentially eligible.
• Active Trading: Tokens should show consistent daily volume— no dormant assets, or proxy a protocol action with the same. 
• Broad Distribution Potential: The token should be designed to spread across a wide base of users, not concentrate in a few hands.

Reward Vault Requirements

To be eligible for BGT emissions, reward vaults must demonstrate that they support network goals and user value creation.

Ecosystem Value

• Adds Ecosystem Utility: The reward token should help boost the use or value of Berachain’s native token (BERA) as a priority or other major assets in the ecosystem. This can happen directly (e.g. by pairing in a liquidity pool), or through novel use cases that expand application demand in the Berachain ecosystem. Utility is multifactorial, so successful reward vault applications will likely demonstrate the ability to drive some combination of users, trading volume, TVL, and/or fees on Berachain.
• A successful Reward Vault application should have already demonstrated some basic level of product-market fit, and the request should expand on how they plan to use the Rewards Vault to scale their existing product.
• Reasonable Emission Fees: Fees taken on yield should not be exorbitant and taken for the sole purpose of recycling into more incentives, or circumvent best risk practices for the protocol to the end of greater incentives.
• Yield Stacking: If a 4626 (or equivalent) vault generates yield from BGT farming, that yield must be fairly passed on to stakers rather than recycled into more incentives. Yield generated from non-BGT rewards vault sources is eligible to be recycled into incentives. This is to prevent double-dipping of BGT incentivization without creating any additional utility.

Incentive Design Guidelines

Berachain’s incentive marketplace is built to reward aligned behavior and effective value creation. New standards ensure consistency and sustainability:

Technical Requirements

• Live & Decentralized Incentive Tokens: All tokens used for incentives must be deployed, verified and available on a pool with at least $100,000 in TVL, with half of that in a major asset such as BERA or HONEY. Other major assets like wBTC, wETH, or correlated asset pairs are also eligible. Incentive tokens should have at least 100 holders.
• Contracts live: All contracts being incentivized via a reward vault must be live; reward vaults be pre-approved for theoretical or “to be launched” contracts.
• Gas efficiency: The incentive token transfer should be gas-efficient, meaning it shouldn’t cost more than 500,000 gas units for transactions. This keeps fees reasonable for users.

Minimum Program Viability

• Sufficient Duration: Incentive programs should plan to run for at least two months to support sustainable user engagement.
• Sustainable Incentives Allocated: Each program should target the ability to incentivize at least $10,000 per month, enabling up and coming teams to get involved in PoL. Incentives should be posted within a reasonable price range, given market prices.

Timelines for Changes 

• Rewards Vaults that do not conform to the updated criteria will have one week to update to the new criteria. Any that do not make the required changes will be subsequently delisted, and will have to re-apply through governance. 
  • For Change Requests, use the form linked here.
• Teams at risk of being delisted will be directly contacted.
• The schedule for Rewards Vault requests will proceed on the normal schedule, with the next deadline coming up on April 10th at 00:00 UTC. 
• Accepted Rewards Vaults from this deadline will be formally announced and processed in the week following.
• There are a few other technical changes being made to the Proof of Liquidity logic, which are currently in audit, and should be live within the next ~week. 
  • Shorten RewardAllocationDelay: allow Validators to update cutting board allocations more frequently. 
  • Update addIncentive to Allow Upside Adjustments: Incentive Operators will now be able to edit their incentive ratio upward without needing to add more incentives.
  • Ease Authorization for addIncentive at Current Rate: Third Parties will be able to permissionlessly add incentives to any Rewards Vault, contingent on the Incentive Operator approving their addition (to prevent gamification). 
  • Implement Max Weight on Cutting Board of 30%: Each Validator will have a max weight of 30% per Reward Vault on their cutting board. This will increase the number of Rewards Vault simultaneously participating in Proof of Liquidity, making fills more consistent and yield less volatile. 

Why It Matters & What Comes Next

Proof of Liquidity is one of the most powerful token distribution models in crypto— but it only works if the inputs (tokens, vaults, incentives) are designed with care. These updated standards aim to:

• Prevent extractive or low-value proposals
• Create a level playing field for serious builders
• Maintain alignment between validator incentives, user rewards, application growth, BERA value accrual, and sustainability.

At the same time, the governance team is actively building out the next phase of improvements to further strengthen the system. Upcoming updates will include:

• A formal process for delisting deprecated or extractive vaults
• Detailed feedback on applications which are not approved 
• UX improvements for validators and BGT boosters, such as faster update frequency and auto-boosting options
• Improved data visibility so builders can model, measure, and optimize their PoL strategies with confidence

If you're building in the Bera ecosystem, now is the time to accelerate. Review the new standards, refine your designs, and submit thoughtful RFRVs that help move the network forward. 

Onward to Berabundance.