Over three days, the native coin of the L1 project Berachain (BERA) lost more than 60% of its market capitalization. Experts and community members commented on the hasty sell-off and the issues related to large allocations to venture investors.
Berachain is a modular first-layer blockchain with EVM support. The network employs a Proof-of-Liquidity consensus algorithm, a variation of delegated Proof-of-Stake. The model involves three assets: BERA for gas payments, BGT for governance, and HONEY as a stablecoin.
In April 2023, Berachain developers raised $42 million in a funding round led by Polychain Capital. A year later, they secured another $100 million in a Series B round headed by Framework Ventures.
The mainnet launch and BERA airdrop took place on February 6.
Within hours, the price peaked at around $15, but by the next day, it had dropped approximately 50%. At the time of writing, the asset is trading at $5.2. According to CoinGecko, the market capitalization stands at $539 million.
This kind of performance following one of the most anticipated airdrops disappointed many users.
One commentator noted that due to the price crash and the specifics of his country’s tax laws, his claim turned from $50,000 into $230.
If you’re a European higher rate tax payer who claimed the Bera airdrop at launch and held until now, a 50k airdrop is worth $230 after you pay your tax bill. pic.twitter.com/gxEG1sDw94
— Happy (@happysubstack) February 9, 2025
“If you’re a European higher rate taxpayer who received the BERA airdrop and held onto the coins until now, after the appropriate payments, your $50,000 share will be worth $230,” the user noted.
Project researcher Amagi, under the pseudonym Choze, pointed out that the price collapsed under the selling pressure from airdrop participants, and on February 10, another large batch of coins will be unlocked.
Every Layer 1 token is starting to recover, except $BERA.
MC dropped from $1.5B to $500M in just 4 days.
People who got the airdrop instantly dumped, and tomorrow, a huge chunk of the social airdrop will unlock.
That’s why no one wants to buy at these levels. Airdropped… pic.twitter.com/z8WAQBKTYt
— Choze? (@AlwaysBeenChoze) February 9, 2025
“That’s why no one wants to buy at these levels. Holders are selling off the received coins, and there’s a chance that those who claim theirs tomorrow will do the same to lock in profits,” he suggested.
According to the researcher, the team overly focused on the community incentives program, which in itself “won’t make the blockchain viable.” At the same time, he cited the “massive ecosystem” and the number of applications as positive factors for network stability.
In a comment to The Block, Dragonfly’s general partner Rob Haddick explained that the level of criticism is always directly related to the level of profit for early participants:
“If the token had performed better, you would likely see very different sentiments on Twitter.”
He added that projects often deliberately motivate large holders like liquidity providers and funds not to sell unlocked tokens. When incentives run out, assets hit the market and exert pressure on the price.
Founder of crypto hedge fund Split Capital, Zahir Ebtikar, noted that many projects with significant venture funding show a disproportionately high FDV relative to the circulating volume.
According to Hack VC founder and Berachain investor Ed Roman, projects do not directly control their own diluted valuation but can decide what portion of the supply is available at launch. He believes the real appeal of a blockchain in its early stages can be tracked by the state of its ecosystem:
“Markets are ‘voting machines’ in the short term and ‘weighing machines’ in the long term. If the team is strong enough, they are likely to create a protocol with substantial market appeal and a dynamic ecosystem.”
Back in January, the Jupiter token depreciated ahead of a 700 million JUP airdrop.