Briefing
Infrared Protocol, the primary liquid staking solution on Berachain, has decisively surpassed $2 billion in Total Value Locked (TVL) eight months after its mainnet launch. This milestone validates the novel Proof of Liquidity (PoL) economic primitive, establishing a new framework where network security and native DeFi activity are intrinsically linked. The protocol operates as foundational infrastructure, controlling the distribution of Berachain’s native governance token (BGT) and serving as the dominant liquidity source for the ecosystem. The rapid accumulation of capital, now exceeding $2 billion in TVL, confirms the market’s demand for a highly capital-efficient Layer 1 bootstrapping mechanism.
Context
Prior to the emergence of PoL, new Layer 1 ecosystems faced a persistent cold-start problem characterized by fragmented liquidity and a high cost of capital acquisition. Traditional Proof-of-Stake (PoS) models often incentivize passive staking that locks capital away from the application layer, leading to shallow DEX pools and low composability. This friction created an environment where new dApps struggled to secure deep, sustainable liquidity without resorting to unsustainable token emission programs. The market required an architectural solution that could unify security and liquidity provisioning into a single, self-reinforcing mechanism to accelerate ecosystem maturity.
Analysis
Infrared’s success is a direct consequence of its integration with the Proof of Liquidity model, which mandates that users provide liquidity to core DEX vaults to earn the network’s governance token, BGT. This architecture fundamentally alters the application layer by making liquidity provision a core economic primitive of the chain itself. The protocol’s liquid staking token, iBGT, represents a claim on the underlying BGT and its associated rewards, positioning it as the primary collateral asset for all downstream DeFi applications.
By operating 167 of Berachain’s 193 vaults, Infrared effectively directs the flow of BGT rewards, creating a powerful flywheel → increased iBGT demand drives deeper liquidity, which in turn attracts more users and strengthens the protocol’s network effects. This system internalizes value capture, ensuring that the network’s security budget directly funds its core financial infrastructure.
Parameters
- Total Value Locked → $2 Billion. This figure quantifies the total capital deposited into the protocol’s vaults, establishing its market dominance within the Berachain ecosystem.
- Vault Control Share → 167 of 193. This represents the number of Berachain’s core liquidity vaults directly operated by Infrared, indicating its infrastructure-level control over the Proof of Liquidity mechanism.
- Liquid Staking Token Supply → 16 Million iBGT. This metric reflects the expansion of the liquid asset supply, demonstrating widespread adoption of iBGT as a composable yield-bearing primitive.
- Annual Yield Range → Double-Digit to Triple-Digit APR. This confirms the high capital efficiency and attractive incentive structure of the PoL vaults, driving user acquisition and retention.
Outlook
The immediate strategic outlook for Infrared involves deepening the utility of iBGT by integrating it as the default collateral across Berachain’s emerging money markets and perpetual decentralized exchanges. This move will solidify iBGT’s position as the ecosystem’s foundational liquidity primitive, creating a defensible moat against future competitors. The Proof of Liquidity model itself is now a validated architectural blueprint, and builders on other nascent Layer 1s will inevitably attempt to fork or adapt this mechanism to solve their own liquidity bootstrapping challenges. The next phase will focus on whether this model can sustain its high yield and TVL as the network matures and BGT issuance rates normalize.
