Smokey the Bera - Berachain: The Reverse Blockchain Mullet - TOKEN2049 Dubai 2025

Oh man. Okay. Well, uh, thank you guys all for having me here. I think that sometimes they say to save the best for last, but sometimes you open with the worst. And, uh, that'll be a great start to the day as a whole.

So, thank you so much. My name is Smokey, co-founder and CEO of Bear Chain. Um, and I'll tell you a little bit about what we're up to. Uh, the good, the bad, the ugly, and and the guy in the bear mask. Um, as it may be obvious to you, bar chain does not always necessarily model as a uh super traditional blockchain in that every now and then you get the the bear guy in the front and the businesses in the back.

And that's kind of the story that I'd like to be able to tell. So, for those who aren't familiar, Bear Chain itself did not actually come out of a traditional academic institution uh or a Fortune 500 or anything of the sort. Uh, Bearchain was born very much as a happy accident that spun out more than anything else from a Discord server of a number of bears uh, engaging in weird activities. Um, and that started about four years ago in the summer of 2021 uh, as nothing more than a joke. My co-founder and I had been in and out of crypto for the better part of the last decade.

And we thought to ourselves, we're at an interesting point where on one hand, DeFi is becoming sophisticated. NFTs are seeing something that is not just pictures of monkeys. Uh so therefore we'll make multiplying pictures of bears uh as that seemed a lot more relevant to us. Um the interesting things I think we actually ended up looking at were sort of twofold as we built this community of uh you know NFT enthusiasts at the intersection of DeFi 2.0 O and NFTs and we found ourselves actually talking to real users and real developers which uh I think paid dividends over a longer term in that we found that there was a meaningful misalignment at the actual network level between liquidity and security when one was allocating a given amount of capital whether that's 32 ETH or 3000 Avac or whatever it is they were saying to themselves do I go and contribute this to a node and increase network security or do I pop this in a do I pop this in unis swap do I add to this network's liquidity I I think beyond this what we really saw was that all these different application developers were looking at one chain over the other over the other and in some cases it was chasing a hype cycle.

In other cases, it was actually asking a question of why should I live here, right? Maybe, you know, back in the in the grant days of 2021 and 2022, it was okay, these guys are going to throw me a bunch of money. Um, but at the end of the day, it boiled down to the same odd question of why should I, as an application care about the chain that I'm building on? Why is this nothing more than a, you know, a place for cheap rent and perhaps somewhere to post up for a couple of months before something more exciting comes to town? Uh, and we very much thought to ourselves that there has got to be a better solution at the network level.

And our fundamental thesis, I think barchain has been building around as a whole is a real bet on the application layer. I think that this has become, you know, more and more consensus over time, but this has always been part of the bar chain, you know, thesis in that at the end of the day, I don't think a user could give a about whatever chain they're on. I think they care about the experience that they get from their application. They care about whether a problem is really being solved that they care about and need to see, you know, taken care of. Uh, and at the end of the day, especially as a lot of the um, you know, the wheat shakes out from the chaff, etc.

, And we find ourselves in a world with real fundamentals and people thinking how do I build a business that sustains beyond the token emissions especially in a world where things are not up only with a bunch of stemmies by default. You think to yourself how do you actually build the best place for applications to succeed and at the end of the day bar chain which is powered by a variant of proof of stake called proof of liquidity is the ultimate accelerator for the application layer. And that's what I'm going to tell you guys a little bit more about. Um, at a very high level, you know, going through the technical stats of bear chain, uh, it does in fact have a bear on it. But beyond that, it also features a fully EVM identical environment.

So about as close as you can get to ETH mainet, even more than L2s, etc. Um, identical unmodified ETH clients are being run, allowing you to basically have full identicality from EIPs to op codes and everything in between. Um, it also uses comet BFT/Tenderment under the hood, which means that you get single slot finality and sub2cond block time, so that you're getting the best of both worlds. A very familiar execution environment in the EVM for developers and a very speedy, relatively speaking, execution environment for people who are actually looking to build derivatives applications, trading, things that, you know, I'd say contribute to a positive user experience. Now, when you think about a typical L1 chain, you think about a proof ofstake chain that's sitting between, you know, 5 and 10% emissions uh on a yearly basis.

And they're thinking to themselves, we're going to use these block awards and these emissions to underwrite the security of the network. We're going to make sure the validator set is more robust. We're going to give people a reason to hold this token. Um, I'd say the bear chain has taken things in an opposite direction in that we believe that the most important thing for the network to actually underwrite is not just its security, but actually its liquidity and network activity. Because at the end of the day, if you have this cost of running a chain and you're ultimately betting on the success of that chain and its ecosystem, the way that that actually wins is by investing in the layer which is driving that growth itself and driving value to the applications and the users that are building on top of that network.

So to put that in a in a very simple form, bar chain is internalizing its inflation. So in a typical proofofstake chain while those block rewards and emissions are going to validators and or their delegates in bear chain the validators are actually pointing those rewards towards applications and in turn those applications are passing along those rewards towards their users. Um this gets quite interesting because it means that what bar chain does more than anything else is actually serve as a you know booster for its app layer and a a group which is actually able to reduce the customer acquisition cost for any different application building on the network itself. So really at the end of the day the goal is for proof of liquidity itself to help applications scale. And what gets interesting is that this can go beyond just liquidity because the way the proof liquidity works is that you can point emissions at the network level at any different thing that is stakeable.

So on one hand this could be something as simple as an LP token that has been deposited in a DEX and you can say okay cool I've taken this from 100K to $2 million of liquidity in a day. But on the other hand, where it gets even more exciting is when you can use proof of liquidity to actually drive the actions in an application that are the most important for its long-term success and those which actually contribute towards unit economic positive behaviors. You could say and add an actual degree of logic gating to almost any incentive layer within an app. So for example, for a per stex like bro trade in the crowd over here, you could go and say after x amount of volume or after x amount of fees being generated, a user receives a token which can then get emissions. For a game, you could say that after playing this game for 3 days or after completing x level, they get emissions.

For a structured product, you could directly just incentivize depositing into that contract. So the way that we see it is that the sky's is the limit with P. So to give you a quick series of case studies, uh one of these is Kuma, a per L2 building on Barchain. They recently set up a volume uh you know incentivization token and quickly SC saw their um their volumes raising by about 20% on a couple of days. Not long after came another game called Overunder that's getting ready to utilize proof liquidity.

These guys are incredibly exciting. a onchain esports computer vision powered sports betting platform. That basically means that they can bet on Twitch streamers and actually understand what's happening in the game without having someone to tell you whether they won or not. Uh these guys have a small user base of 500 users, none of which know what bear chain is that they found from the real world. And they're actually going to be using this to incentivize getting users to that point of returning and stickiness where after three visits they have an 80% chance of coming back for the fourth.

There's groups like Daylight in the DPIN/RWA space that are building an actual structured product offchain that is actually helping to finance solar grids all across America, throwing off reliable 30% APYs in which they're actually just building a massive capital TR on chain and deploying that across many different networks. So when we think about this and we zoom out and we say, okay, how's this actually going? I think that while we're at the absolute earliest stages and bear chain's only been live for about 3 months, we've seen ourselves with 50 plus live applications on the chain, a variety of novel novel DeFi primitives, a number of TGEs listed on major exchanges, whether it be bybit, OKX, BitGet, etc. Uh, and I'd say an ecosystem that is rapidly growing by the day with tons of venture funding going into top teams in the network. And what's even more interesting and that I think is perhaps very well uh you know hidden at the moment is that bar chain is actually one of the few ecosystems that is actually able to gain money and actually you know find itself working towards a degree of revenue positivity at the application layer itself because the way to think about it is that these emissions that are coming from the network are not just being given out as as grants or internal subsidies.

uh in fact it actually very much I'd say spurs a competitive network amongst the applications living on the network where they are actually bidding for block awards and saying to the validator set in exchange for you know 80 cents that I'm going to give you you're going to give me $1 in exchange you're going to get my TVL my users my liquidity my transactions on this network along with this fee so at the moment you know from bear chain's emissions we're seeing about $und00 million in annualized revenue going towards the holders the token and we're seeing this represent itself within the ecosystem as well. We are extremely excited to have a number of the top applications across DeFi and hopefully in the not too distant future a number of the ones across gamefi consumer deepen very many more. Um right now infrared is a top five LST by TVL. Dolomite is a top 10 lending market by TVL. Kodiak is a top five decks by TVL and Bear Chain surprisingly enough also has the most PayPal USD outside of ETH mainet where it's actually issued.

Um so you know while the bears stay a little bit silly on the front there's a lot of work being done on the back. Um there's a massive NFT ecosystem that's come out of bear chain and we're starting to see more people experiment with everything from liquidbacked NFTs to NFT staking to ways of actually financializing these NFTs to an extent which has not been done before. And what's coming next is a number of other applications that are going to continue doubling down on using bar chain and proof of liquidity to enhance their distribution, their liquidity profile, and their ability to make users engage in the in the actions that they really want to see. Whether that is uncloudized lending against web 2 credit scores through Plaid, whether that is fan engagement platforms for major sports teams or massive compute deals being brought on chain, and apparently even passports for your pets, which might be especially relevant here. And I'd say that this has all been underpinned by uh a very eccentric culture that goes somewhere deep between the left and the right curve.

Uh on one hand, we'll have guys remaking American Psycho and bear masks. Uh on the other hand, we'll have teams raising rounds from some of the best VCs across the world and building products that people love to use. And as we see this at the end of the day, what we are trying to really do is make chain the place to take your application from zero to one. And the whole goal for proof liquidity is to be the next place where category defining apps are built and winners are made. Thank you so much.