Original | Odaily Planet Daily ( @OdailyChina )
Author: Azuma ( @azuma_eth )
Last Monday, Berachain officially launched the Proof of Liquidity (PoL) mechanism, which aims to solve the incentive mismatch problem in traditional PoS blockchains by building a bribery model similar to Curve veCRV to directly create an incentive flywheel at the public chain level.
For the detailed mechanism of PoL, please refer to the detailed explanation in the article Detailed explanation of Berachain PoL mechanism: a more radical bribery model than Curve . The focus of this article is on the only leader in the Berachain ecosystem at present - Infrared Finance, the basic protocol ranked first in real-time TVL.
Infrared Finance: PoL Liquidity Staking Protocol
Infrared Finance is positioned as a liquidity staking protocol under the PoL mechanism.
Since January 2024, Infrared Finance has completed three rounds of financing:
In January 2024, Infrared Finance announced the completion of a US$2.5 million seed round of financing , led by Synergis, with participation from NGC Ventures, Tribe Capital, CitizenX, Shima Capital, Dao 5, Signum Capital, Ouroboros Capital, Decima, Oak Grove Ventures, DoraHacks, Tenzor Capital, Alex Shin, Albert Chon, Charles Lu, Mr. Block, Chris Spadafora, DCF God and others.
In June 2024, Infrared Finance once again announced the completion of a strategic round of financing, with Binance Labs as the only investor , and the specific amount was not disclosed.
In March 2025, Infrared announced the completion of a US$16 million Series A financing round , led by Framework Ventures, with participation from Citizen X, Halo Capital, No Limit Holdings, NGC Ventures and Selini Capital.
Different from the traditional PoS network, Berachain, which adopts the PoL mechanism, has two native tokens BERA and BGT - BERA is used for gas and staking, and BGT is used for governance and incentive allocation. BGT cannot be transferred or traded, and can only be converted into BERA in one direction, but BERA cannot be reversed into BGT.
For this special architecture, Infrared Finance launched two liquidity staking tokens iBERA and iBGT for BERA and BGT.
iBERA is easy to understand, you can just treat it as LST like Lido stETH or Jito jtoSOL. iBERA does not support reverse redemption yet, but will open redemption channels in the future.
The key lies in iBGT. Since BGT cannot be traded, users cannot actively pledge BGT for iBGT. Instead, they can only pledge liquidity (such as LP tokens of DEXs such as BEX) to Infrared Finance. Infrared Finance will use the BGT incentives obtained through these liquidity to generate iBGT and distribute it to users at a 1:1 ratio. In simple terms, users originally provided liquidity on Berachain to obtain BGT incentives, but after pledging liquidity through Infrared Finance, BGT will be given to Infrared Finance, and users will receive iBGT. iBGT can be traded freely, but due to the limited liquidity of BGT, it can never be reversed and redeemed for BGT.
Interaction Logic
From the perspective of gaining potential airdrops, current interactions with Infrared Finance mainly revolve around iBGT and iBERA, especially the former.
The first and simplest operation is to pledge BERA to obtain iBERA . There is no need to explain this step.
The second step is to obtain iBGT. This step requires users to pledge the liquidity tokens of major DeFi protocols on Berachian , such as BEX, Kodiak, etc.
After receiving iBGT incentives, users can choose to stake iBGT again to obtain higher incentive returns (currently 191.75%).
In addition to the acquisition paths within the above-mentioned protocols, users can also purchase iBERA and iBGT directly in the secondary market. However, due to the large restrictions on the acquisition of iBGT and the high subsequent incentives, iBGT currently has a significant premium over BGT (BERA) . Therefore, users are more recommended to obtain it by providing liquidity.
It is worth mentioning that Pendle has also opened iBERA and iBGT pools, and the annualized returns are very impressive (iBGT can reach up to 541%), so another potential participation model is the hedging strategy of spot entry into the pool, equal amount of contract shorting, which can earn considerable annualized returns while participating in the interaction.
As the basic protocol with the largest financing scale and the highest TVL in the entire Berachain ecosystem, the subsequent development of Infrared Finance is expected to be highly tied to Berachain. If you are optimistic about Berachains unique PoL Ponzi mechanism, using Infrared Finance in the long term may be a more cost-effective choice.
