The Paradigm Shift of Stablecoins: A New Capital Efficiency Landscape Created by Berachain and USDT0

In the DeFi reboot cycle of 2025, the funding structure and incentive logic are undergoing a profound change.

The rise of Berachain marks a new stage in the exploration of consensus mechanisms and capital efficiency for the new generation of public chains. Among them, the most representative case is the "second evolution" of stablecoins on Berachain.

1. PoL Model: From Inflation-Driven to Liquidity-Driven

The traditional PoS model relies on inflation subsidies and static staking weights to allocate block rewards, leading to a disconnect between incentives and actual liquidity contributions. Berachain's Proof of Liquidity (PoL) reshapes the incentive mechanism through the following paths:

The protocol must first attract liquidity in order to qualify for reward distribution;

Validator voting is tied to protocol rewards, incentivizing competition between protocols;

LP behavior affects incentive weights, giving users a greater say in capital allocation.

This mechanism not only enhances incentive efficiency but also allows on-chain funds to form a self-optimizing cycle: protocol competition → LP decision-making → improved fund utilization rate → increased user activity → overall capital efficiency of the ecosystem improves.

The migration of Dolomite is an intuitive example: since its deployment in February 2025, its total lending amount has surpassed $3.3 billion, with TVL achieving nearly a 20-fold increase, making it a representative protocol of Berachain.

2. The Evolution of USDT0: From Payment Medium to Yield Asset

Stablecoins are the core infrastructure of Decentralized Finance, but in previous cycles, they played more of a role as "digital cash". The emergence of USDT0 has opened up new pathways for value capture in stablecoins.

● Cross-chain Frictionlessness: Based on the LayerZero OFT standard, USDT0 achieves native cross-chain transfer.

● Profitability of Berachain: The PoL mechanism endows USDT0 with yield attributes, allowing users to earn up to 100% annualized returns in the USDT0-HONEY pool.

● Ecological Status: By August 2025, the supply of USDT0 on Berachain will exceed 100 million USD, with a TVL peak exceeding 600 million USD, becoming a core asset for lending, trading, and collateral.

This shift means that stablecoins are no longer passive payment tools, but rather active capital engines.

3. Growth Flywheel Driven by Stablecoins

The expansion of USDT0 has driven the overall flywheel effect of Berachain:

● Funding Side: Pre-deposit of 700 million USD before the mainnet, reaching a peak of 6.3 billion USD in March;

● User Side: The number of active users increased from less than 100,000 to 250,000;

● Protocol End: DEX, lending, and derivatives protocols are deeply integrated around stablecoins.

At the same time, the entry of new stablecoins like USD0 and USDT0++ has further promoted the integration of RWA assets, cross-border settlement, and institutional funds, making Berachain more attractive in the capital markets.

4. Global Comparison and Future Outlook

In Q3 2025, the global DeFi market growth rate is approximately 41%, while Berachain has achieved over 50% growth. Its cross-chain inflow has exceeded $880 million, with stablecoin TVL accounting for over 80%.

Compared to Solana's 35% TVL growth during the same period, Berachain's advantages in capital efficiency and stablecoin integration are more pronounced. If estimated at a 12–15x TVL/FDV multiple, Berachain's potential FDV could reach a range of 7–10 billion USD.

Looking ahead, the competition for stablecoins will shift from "market share battles" to a contest of "whether they can become chain-level infrastructure."

The combination of Berachain and USDT0 provides an example for this trend:

● The yield characteristics of stablecoins enhance capital stickiness;

● The ecological penetration of stablecoins enhances protocol reuse;

● The cross-chain capability of stablecoins amplifies Berachain's global competitiveness.

Conclusion:

Berachain is reshaping the capital efficiency logic of DeFi with a combination of "PoL + stablecoins." The "second evolution" of stablecoins not only changes the way users utilize their funds but also makes Berachain the most representative growth example in the new cycle.