Berachain, the hottest topic at Token 2049 in Singapore, could grow into a significant competitor to Solana.
Berachain is branded as a “high-performance” layer-1 (L1) blockchain, aiming to turn liquidity into security through its unique proof-of-liquidity (POL) consensus mechanism.
While most investors are preoccupied with altcoins like Ripple’s XRP (XRP) overtaking Ether (ETH), some suggest that the real competitor could be a new token.
Berachain’s upcoming token (BERA) could be the next major Ether competitor, according to Vance Spencer, the co-founder of Framework Ventures.
Spencer told Cointelegraph during an interview at Token 2049 in Singapore:
“Will SOL flip ETH? I mean, XRP flipped ETH in 2017, but really, the question that I have is: Can Berachain flip SOL?”
Michael Anderson, co-founder of Framework Ventures, Smokey the Beta, co-founder of Berachain, Token 2049. Source: Cointelegraph
Solana’s (SOL) price has been in an over five-month downtrend since the beginning of April, falling over 8% during the past 30 days. Analysts are concerned that Solana could see more downside against Bitcoin (BTC), similar to Ether’s recent correction against Bitcoin, which reached its lowest point in over three years.
SOL/USD, 1-month chart. Source: Cointelegraph
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Berachain’s economic alignment is what markets are yearning for
The optimistic perspective comes as the industry is waiting for the launch of the Berachain mainnet, planned before the end of 2024.
The upcoming Bera token, currently live on testnet, will serve as the network’s gas token for paying transaction fees and as a staking token to enhance network security.
However, the mainnet launch could bring significant attention to the token, thanks to the Berachain’s economic alignment, explained Spencer:
“[The market] is yearning for an aligned ecosystem, and that is the crux of the argument against ETH, as flawed as it is, but I think there are ways to solve that, especially with a fair chain consensus mechanism.”
Berachain’s POL consensus mechanism could usher in a fully-aligned blockchain ecosystem by diverting some of the profit back to ecosystem participants, added Spencer:
“When you stake BERA, you have to direct the liquidity you get towards these primitives. And so all the fees stay in the ecosystem. They all flow to BGT AND BERA holders, and I think that's what the market was yearning for.”
Spencer’s Framework Venture co-led a $100 million funding round into Berachain at the beginning of April 2024.
$100 million Berachain funding round. Source: Framework Ventures
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Why are crypto investors so bearish?
Despite the optimistic outlook, Spencer also addressed the general negative, or bearish sentiment, in the crypto space.
According to Spencer, the past six months’ price action in traditional and digital markets is the main reason behind the poor investor sentiment.
He added:
“Every asset class has been in a range for the past six months, and so I think everyone's pretty universally unhappy. Again, SOL and ETH were flat for the past six months and in the past two years as well. There's obviously a big dip in between there.”
However, other notable market analysts, including Michaël van de Poppe, predict a significant rally for both cryptos and commodities, due to the asset classes being “extremely undervalued.”
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