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crypto.news 2025-02-11 05:13:18

Berachain faces backlash over airdrop controversy and insider dumping concerns

Berachain’s “Proof of Liquidity” model is under fire as early investors cash out, triggering a 63% price drop from its launch high. Berachain ( BERA ), the highly anticipated layer-1 blockchain, officially launched its mainnet on Feb. 6, introducing an ambitious “Proof of Liquidity” mechanism and one of the largest airdrops of the year. Berachain’s origins trace back to the Bong Bears NFT collection, a cannabis-themed project that launched in 2021. Major exchanges, including Binance, MEXC, Upbit, and Bithumb, quickly listed BERA, fueling excitement around its ecosystem. As of Feb. 11, the project reached a total value locked of $3.1 billion just days after its launch, making it one of the most discussed blockchain launches in recent months. However, concerns over its airdrop allocations, tokenomics, and insider trading activity have overshadowed the initial hype. Users who participated in Berachain’s testnet expressed disappointment, claiming they received far fewer BERA tokens than expected. Frustrations intensified when analysts uncovered deeper issues in the token’s structure, particularly how early investors and insiders were benefiting from the network’s staking mechanics. Berachain’s blockchain is built around three interconnected tokens—BERA, BGT, and HONEY—each serving distinct functions. Critics argue that private investors, who hold over 35% of the total BERA supply, can stake BERA, earn BGT, burn BGT for additional BERA, and sell it, creating a potential loophole that allows early backers to extract liquidity while regular holders bear the downside. “Wait, so insiders can cycle through the token mechanics and dump on retail? This can’t be real,” one frustrated trader remarked. Wait, so all the huge insiders of Berachain, with locked $BERA tokens, can stake the $BERA , receive $BGT , burn the $BGT for $BERA and then dump the $BERA ???? Please tell me this isn't true… It's almost criminal pic.twitter.com/iZvmoSyBW0 — yugo (@yugoviking) February 6, 2025 Adding to the controversy, data suggests that one of Berachain’s core developers, known as “DevBear,” received 200,000 BERA from the airdrop and sold portions of it shortly after launch. A long thread about my thoughts regarding Berachain’s current situation As many of you know, I’ve been very vocal about Berachain and I’ve spent a lot of time and effort in the ecosystem. After all this, I feel that I have to share my honest opinion regarding the launch, the… pic.twitter.com/X3WAnVNwDO — Ericonomic (@ericonomic) February 9, 2025 “A co-founder selling tokens immediately after launch? That’s not a great look,” one observer pointed out, raising concerns that insiders were offloading their allocations while the broader market absorbed the selling pressure. As these revelations spread, BERA’s price, which reached a high of $14.99 on Feb. 6, has plummeted 63% to $5.57 as of Feb. 11. While volatility is common in newly launched tokens, the rapid decline raises the question of whether Berachain’s pre-launch hype was sustainable or if the token’s structure inherently benefits insiders more than retail participants.

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