Author: Nancy, PANews On November 25th, overseas media outlet Unchained published a lengthy investigative report revealing that the popular public blockchain Berachain had signed a privacy agreement with venture capital firm Nova Digital, secretly granting it a risk-free exit privilege. With the token price and ecosystem still weak, this news immediately caused an uproar within the Berachain community. However, Berachain officials denied the allegations, stating that Nova remains one of the largest holders of BERA tokens. Berachain denies discriminatory treatment after reports surfaced that lead investor Nova enjoys exclusive refund rights. In this crypto cycle, the golden age of crypto venture capital is gradually fading. Returns are shrinking, their voice is diminishing, and their industry influence is far less than before. There's even been a wave of resistance to VC tokens, leaving investment institutions in the awkward position of struggling to make money and raise funds. Surprisingly, crypto VCs are also staging a drama of guaranteed returns on investments. According to Unchained, Berachain, originally an NFT project, has raised at least $140 million in funding within just a few years, growing into one of the most popular public blockchains. In its last funding round, Berachain secured a $1.5 billion valuation from Framework Ventures and Brevan Howard's Nova Digital. An anonymous former employee revealed that Brevan promised to "endorse" the project, but demanded favorable terms in the Series B funding round. Documents obtained by Unchained show that Nova purchased $25 million worth of BERA tokens at $3 each during its Series B funding round, and obtained a highly controversial "refund right": the option to demand a full refund of its investment within one year of Berachain's Time-Government Execution (TGE) on February 6, 2025 (i.e., until February 6, 2026). Exercising this right requires Nova to deposit $5 million within 30 days of the TGE. Currently, BERA is trading at approximately $1.04, meaning that if Nova fulfills its margin requirements and exercises its refund right, it will recover its entire principal even at a significant loss, with Berachain bearing the losses. This "no-loss" investment clause has therefore sparked considerable controversy. It is understood that Nova Digital was acquired by the large hedge fund Brevan Howard from Dragonfly Capital in 2023, and raised $9 million for it through its digital asset division, BH Digital, for liquidity token strategies. Nova Digital also became a branch of Brevan Howard's digital asset division, BH Digital, with Kevin Hu from Dragonfly serving as CIO and reporting directly to BH Digital CEO Gautam Sharma. In August 2025, Brevan announced the spin-off of Nova Digital, led by Kevin Hu. Sources familiar with the matter stated that internal losses and differing investment strategies were the main reasons. Kevin Hu was also alleged to have participated in the seed round investment of Berachain. Notably, Kevin's direct supervisor, BH Digital CEO Sharma, also resigned around the same time. Brevan planned to fill Sharma's vacancy but not Kevin's. Neither Brevan nor Nova has responded to this. More importantly, the report points out that other Series B investors have not received refunds. Two anonymous investors stated that they were never informed of such special terms. This is considered a potential violation of the SEC Reg D's "material disclosure" obligations and could trigger MFN (Most Favored Nation) clauses in some investors' contracts. Based on the current price of BERA, many Series B investors are experiencing significant paper losses. Framework Ventures, one of the lead investors, has suffered a paper loss exceeding $50 million. It held 21,145,476 BERA tokens at a cost of approximately $72.4 million, with an average purchase price of $3.42. In response to the reports, Berachain co-founder Smokey the Bera issued an urgent public statement, claiming that the narrative was "incomplete and inaccurate." He clarified the details of the relevant investment agreement, stating that Brevan Howard, through his Abu Dhabi-based Nova Fund, co-led Berachain's Series B funding round a year ago, with investment terms consistent with other investors. Nova's compliance team requested additional terms to mitigate the risks of a failed TGE and failure to go public, leading to the signing of an additional business agreement that included a commitment to provide liquidity after network launch. These terms were not intended to facilitate a transaction or to mitigate potential token price declines after a TGE, a practice with precedent (lead investors typically have special terms such as priority, buyback rights, and exit protection clauses). Instead, Nova remains one of Berachain's largest token holders and a liquidity provider, holding locked BERA tokens from the Series B funding round as well as liquid BERA tokens purchased on the open market, consistently supporting Berachain and continuously increasing its holdings during market volatility. Faced with multiple ecosystem challenges, the DAT strategy failed to reverse the decline in coin price. Despite its impressive funding backing, Berachain's current ecosystem performance is not ideal. According to DeFiLlama data, as of November 25, 2025, Berachain's TVL (TVL) had dropped to approximately $270 million, only 8.1% of its historical peak of $3.3 billion in May of this year, a decline of over 90%. In terms of TVL contribution, the liquidity staking protocol Infrared Finance holds an absolute dominant position in the ecosystem, with a TVL of approximately $230 million, accounting for 86.5% of the total. The TVL of most other protocols is in the tens of millions of dollars or even lower. This indicates that the Berachain ecosystem is singular and lacks diversified product support. Meanwhile, Berachain's user activity has declined significantly since its launch, and it lacks sustained transaction momentum. Dune data shows that as of November 23, Berachain had approximately 3.24 million unique wallet addresses, with daily active wallet addresses remaining at tens of thousands, after a significant drop, it has recently rebounded. Looking at the transaction distribution, addresses with fewer than 5 transactions account for a staggering 83.7%, while addresses with more than 100 transactions account for only 1.6%, indicating that most users are low-frequency participants. Meanwhile, its cumulative transaction volume has approached 289 million, with a peak of approximately 2 million transactions per day in the early days of its launch in February. However, transaction volume subsequently fluctuated and declined, especially dropping to around 200,000 transactions per day in September, but has recently shown signs of recovery. From a revenue perspective, DeFiLlama data shows that since September of this year, Berachain's cumulative revenue is only about $37,000, with only $987 in the past 24 hours, indicating limited value capture capabilities. Meanwhile, Artemis data shows that Berachain is among the top ten chains with the largest outflows of funds in the past six months, with a total outflow of approximately $1.8 billion. Meanwhile, the price of the BERA token continues to decline. CoinGecko data shows that the price of BERA has fallen 93% from its all-time high, and further dropped 44.7% in the past 30 days. It's worth noting that Smokey stated in an interview that if he could do it all over again and the team could start from scratch, he probably wouldn't have sold so many tokens to venture capital firms. In fact, most of the supply was sold during the seed round in early 2022. At the time, the team thought it might be an interesting venture, but they didn't expect it to grow to such a large scale. Therefore, he personally believes that the market criticism is justified. Indeed, over time, Berachain has been working to buy back those seed round and subsequent Series A and other round tokens to reduce community dilution pressure. To boost market confidence, Berachain has recently taken several steps. For example, it has partnered with Infrared and TermMax to introduce fixed-rate lending; and integrated StableFlow to upgrade its ecosystem's payment capabilities. In October, US-listed Greenlane Holdings announced a $110 million PIPE (Private Equity Investment) funding round to launch its BERA Treasury Strategy, including approximately $50 million in cash and $60 million worth of BERA tokens. Investors included Polychain, Blockchain.com, Kraken, North Rock Digital, and CitizenX. Despite the substantial funding, the stock price did not see a significant increase, which is likely related to the overall cooling of the DAT (Digital Acquisition, Technology, and Application) sector.Author: Nancy, PANews On November 25th, overseas media outlet Unchained published a lengthy investigative report revealing that the popular public blockchain Berachain had signed a privacy agreement with venture capital firm Nova Digital, secretly granting it a risk-free exit privilege. With the token price and ecosystem still weak, this news immediately caused an uproar within the Berachain community. However, Berachain officials denied the allegations, stating that Nova remains one of the largest holders of BERA tokens. Berachain denies discriminatory treatment after reports surfaced that lead investor Nova enjoys exclusive refund rights. In this crypto cycle, the golden age of crypto venture capital is gradually fading. Returns are shrinking, their voice is diminishing, and their industry influence is far less than before. There's even been a wave of resistance to VC tokens, leaving investment institutions in the awkward position of struggling to make money and raise funds. Surprisingly, crypto VCs are also staging a drama of guaranteed returns on investments. According to Unchained, Berachain, originally an NFT project, has raised at least $140 million in funding within just a few years, growing into one of the most popular public blockchains. In its last funding round, Berachain secured a $1.5 billion valuation from Framework Ventures and Brevan Howard's Nova Digital. An anonymous former employee revealed that Brevan promised to "endorse" the project, but demanded favorable terms in the Series B funding round. Documents obtained by Unchained show that Nova purchased $25 million worth of BERA tokens at $3 each during its Series B funding round, and obtained a highly controversial "refund right": the option to demand a full refund of its investment within one year of Berachain's Time-Government Execution (TGE) on February 6, 2025 (i.e., until February 6, 2026). Exercising this right requires Nova to deposit $5 million within 30 days of the TGE. Currently, BERA is trading at approximately $1.04, meaning that if Nova fulfills its margin requirements and exercises its refund right, it will recover its entire principal even at a significant loss, with Berachain bearing the losses. This "no-loss" investment clause has therefore sparked considerable controversy. It is understood that Nova Digital was acquired by the large hedge fund Brevan Howard from Dragonfly Capital in 2023, and raised $9 million for it through its digital asset division, BH Digital, for liquidity token strategies. Nova Digital also became a branch of Brevan Howard's digital asset division, BH Digital, with Kevin Hu from Dragonfly serving as CIO and reporting directly to BH Digital CEO Gautam Sharma. In August 2025, Brevan announced the spin-off of Nova Digital, led by Kevin Hu. Sources familiar with the matter stated that internal losses and differing investment strategies were the main reasons. Kevin Hu was also alleged to have participated in the seed round investment of Berachain. Notably, Kevin's direct supervisor, BH Digital CEO Sharma, also resigned around the same time. Brevan planned to fill Sharma's vacancy but not Kevin's. Neither Brevan nor Nova has responded to this. More importantly, the report points out that other Series B investors have not received refunds. Two anonymous investors stated that they were never informed of such special terms. This is considered a potential violation of the SEC Reg D's "material disclosure" obligations and could trigger MFN (Most Favored Nation) clauses in some investors' contracts. Based on the current price of BERA, many Series B investors are experiencing significant paper losses. Framework Ventures, one of the lead investors, has suffered a paper loss exceeding $50 million. It held 21,145,476 BERA tokens at a cost of approximately $72.4 million, with an average purchase price of $3.42. In response to the reports, Berachain co-founder Smokey the Bera issued an urgent public statement, claiming that the narrative was "incomplete and inaccurate." He clarified the details of the relevant investment agreement, stating that Brevan Howard, through his Abu Dhabi-based Nova Fund, co-led Berachain's Series B funding round a year ago, with investment terms consistent with other investors. Nova's compliance team requested additional terms to mitigate the risks of a failed TGE and failure to go public, leading to the signing of an additional business agreement that included a commitment to provide liquidity after network launch. These terms were not intended to facilitate a transaction or to mitigate potential token price declines after a TGE, a practice with precedent (lead investors typically have special terms such as priority, buyback rights, and exit protection clauses). Instead, Nova remains one of Berachain's largest token holders and a liquidity provider, holding locked BERA tokens from the Series B funding round as well as liquid BERA tokens purchased on the open market, consistently supporting Berachain and continuously increasing its holdings during market volatility. Faced with multiple ecosystem challenges, the DAT strategy failed to reverse the decline in coin price. Despite its impressive funding backing, Berachain's current ecosystem performance is not ideal. According to DeFiLlama data, as of November 25, 2025, Berachain's TVL (TVL) had dropped to approximately $270 million, only 8.1% of its historical peak of $3.3 billion in May of this year, a decline of over 90%. In terms of TVL contribution, the liquidity staking protocol Infrared Finance holds an absolute dominant position in the ecosystem, with a TVL of approximately $230 million, accounting for 86.5% of the total. The TVL of most other protocols is in the tens of millions of dollars or even lower. This indicates that the Berachain ecosystem is singular and lacks diversified product support. Meanwhile, Berachain's user activity has declined significantly since its launch, and it lacks sustained transaction momentum. Dune data shows that as of November 23, Berachain had approximately 3.24 million unique wallet addresses, with daily active wallet addresses remaining at tens of thousands, after a significant drop, it has recently rebounded. Looking at the transaction distribution, addresses with fewer than 5 transactions account for a staggering 83.7%, while addresses with more than 100 transactions account for only 1.6%, indicating that most users are low-frequency participants. Meanwhile, its cumulative transaction volume has approached 289 million, with a peak of approximately 2 million transactions per day in the early days of its launch in February. However, transaction volume subsequently fluctuated and declined, especially dropping to around 200,000 transactions per day in September, but has recently shown signs of recovery. From a revenue perspective, DeFiLlama data shows that since September of this year, Berachain's cumulative revenue is only about $37,000, with only $987 in the past 24 hours, indicating limited value capture capabilities. Meanwhile, Artemis data shows that Berachain is among the top ten chains with the largest outflows of funds in the past six months, with a total outflow of approximately $1.8 billion. Meanwhile, the price of the BERA token continues to decline. CoinGecko data shows that the price of BERA has fallen 93% from its all-time high, and further dropped 44.7% in the past 30 days. It's worth noting that Smokey stated in an interview that if he could do it all over again and the team could start from scratch, he probably wouldn't have sold so many tokens to venture capital firms. In fact, most of the supply was sold during the seed round in early 2022. At the time, the team thought it might be an interesting venture, but they didn't expect it to grow to such a large scale. Therefore, he personally believes that the market criticism is justified. Indeed, over time, Berachain has been working to buy back those seed round and subsequent Series A and other round tokens to reduce community dilution pressure. To boost market confidence, Berachain has recently taken several steps. For example, it has partnered with Infrared and TermMax to introduce fixed-rate lending; and integrated StableFlow to upgrade its ecosystem's payment capabilities. In October, US-listed Greenlane Holdings announced a $110 million PIPE (Private Equity Investment) funding round to launch its BERA Treasury Strategy, including approximately $50 million in cash and $60 million worth of BERA tokens. Investors included Polychain, Blockchain.com, Kraken, North Rock Digital, and CitizenX. Despite the substantial funding, the stock price did not see a significant increase, which is likely related to the overall cooling of the DAT (Digital Acquisition, Technology, and Application) sector.