The price fell by 90%, but the leading VC is performing a capital preservation act? Berachain urgently clarifies.

Author: Nancy, PANews

Reprint: White55, Mars Finance

On November 25th, overseas media Unchained published an in-depth investigative report revealing that the star public chain Berachain had signed confidentiality agreements with VCs, secretly granting its leading institution Nova Digital a no-risk exit privilege. As the token price and ecosystem remained weak, this news caused an uproar in the Berachain community. However, the Berachain official denied this, stating that Nova is still one of the largest holders of BERA tokens.

It was revealed that the leading investment institution Nova enjoys exclusive refund rights, while Berachain denies any differential treatment.

In this round of the crypto cycle, the golden age of crypto VC is gradually fading away, with shrinking returns, diminished power of discourse, and significantly reduced industry influence. There is even a wave of resistance against VC coins, putting investment institutions in an awkward position of struggling to make profits and raise funds. Surprisingly, crypto VCs have also staged a performance of preserving capital in their investments.

According to Unchained, Berachain was originally an NFT project but has completed at least $140 million in funding in just a few years, growing into one of the popular public chains. In the last funding round, Berachain secured a joint lead investment from Framework Ventures and Nova Digital, a subsidiary of Brevan Howard, with a valuation of $1.5 billion. According to an anonymous former employee, Brevan promised to “endorse” the project but requested preferential treatment in the B round terms.

Documents obtained by Unchained show that Nova purchased $25 million worth of BERA tokens at a price of $3 during round B, and received a highly controversial “refund right”: the ability to request a full refund of the investment within one year after Berachain's TGE on February 6, 2025 (i.e., until February 6, 2026). The prerequisite for exercising this right is that Nova must deposit $5 million within 30 days after the TGE. Currently, the trading price of BERA is approximately $1.04, which means if Nova fulfills the margin and exercises the refund right, they will recover the principal in full under severe losses, while the loss will be borne by Berachain. This investment clause, which guarantees profit without loss, has thus sparked significant controversy.

It is understood that Nova Digital was acquired by the large hedge fund company Brevan Howard in 2023 from Dragonfly Capital, and raised $9 million through its digital asset division BH Digital for liquidity token strategies. Nova Digital has also become 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 divestment of Nova Digital, led by Kevin Hu, with insiders stating that internal losses and differences in investment strategy were the main reasons. Kevin Hu has also been implicated in the seed round investment of Berachain. It is worth mentioning that Kevin's direct superior, Sharma, the CEO of BH Digital, also left at the same time. Brevan plans to fill Sharma's vacancy but will not fill Kevin's position.

Currently, both Brevan and Nova have not responded to this.

More critically, reports indicate that other Series B investors did not have the right to a refund, and two anonymous investors stated that they were never informed of such special terms. This move is seen as potentially violating the “material disclosure” obligation under SEC Reg D and may trigger the MFN (Most Favored Nation) clause in some investors' contracts. Based on the current price of BERA, several Series B investors are in a state of severe losses, including one of the leading investors, Framework Ventures, which has a paper loss of over $50 million, holding 21,145,476 BERA with a cost of around $72.4 million and an average purchase price of $3.42.

In response to the report, Berachain co-founder Smokey the Bera urgently stated that the relevant narrative is “incomplete and inaccurate.” He clarified the details of the investment agreement, stating that Brevan Howard co-led Berachain's Series B financing a year ago through its Abu Dhabi office's Nova Fund, with investment terms consistent with those of other investors. Nova's compliance team requested additional clauses to mitigate the risks of TGE failure and failure to go public, hence both parties signed an additional commercial agreement that includes a commitment to provide liquidity after the network launch. These clauses are not intended to facilitate the transaction or to evade the potential drop in token prices after TGE, as such practices have precedents (lead investors typically have special clauses such as preferential rights, buyback rights, and exit protection clauses). Instead, Nova remains one of the largest token holders of Berachain, is a liquidity provider, holds the locked BERA tokens obtained from the Series B financing as well as the liquid BERA tokens purchased on the open market, continuously supporting Berachain and increasing its holdings amid market fluctuations.

Facing multiple ecological challenges, the DAT strategy struggles to stop the decline in coin price.

Backed by a luxurious financing background, Berachain's current ecological performance is not ideal.

According to data from DeFiLlama, as of November 25, 2025, Berachain's TVL has dropped to approximately $270 million, only 8.1% of this year's historical peak of $3.3 billion in May, a decline of over 90%. In terms of TVL contribution, the liquid staking protocol Infrared Finance holds an absolute dominant position in the ecosystem, with a TVL of about $230 million, accounting for 86.5% of the total, while most of the TVL of 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.

At the same time, the user activity of Berachain has also seen a significant decline since its launch, and there is a lack of sustained trading motivation. According to Dune data, as of November 23, Berachain has approximately 3.24 million independent wallet addresses, with daily active wallet addresses maintaining in the tens of thousands, having experienced a significant decline during the period but recently showing some recovery. From the distribution of transaction counts, addresses with fewer than 5 transactions account for as much as 83.7%, while those with over 100 transactions only account for 1.6%, indicating that most users are low-frequency participants. Meanwhile, its cumulative transaction count has approached nearly 289 million transactions, with the trading volume at the beginning of February reaching a peak of about 2 million transactions per day, but subsequently, the trading volume gradually fluctuated downward, especially declining to around 200,000 transactions by September, although there are recent signs of recovery.

From the income perspective, DeFiLlama data shows that since September of this year, Berachain's cumulative income is only about $37,000, with a revenue of just $987 in the past 24 hours, indicating limited value capture ability. At the same time, Artemis data shows that Berachain is among the top ten chains with the highest outflow of funds in the past six months, with a total outflow of approximately $1.8 billion.

The price of the BERA token continues to decline. According to CoinGecko, the BERA price has dropped 93% from its historical peak and has decreased by 44.7% in the past 30 days. It is worth mentioning that Smokey stated in an interview that if he could do it all over again, and the team could start from scratch, they might not sell so much of the token supply to venture capital firms. In fact, most of the supply was sold during the seed round at the beginning of 2022. At that time, the team thought it could be an interesting venture, but they did not expect it to grow to such a large scale now. Therefore, he personally believes that the market's criticism is justified. In fact, over time, Berachain has been working to buy back those tokens from the seed round and subsequent Series A round to reduce the dilution pressure on the community.

In order to boost market confidence, Berachain has also taken action recently. For example, Berachain introduced fixed-rate lending in collaboration with Infrared and TermMax; Berachain integrated StableFlow to upgrade its ecological payment capabilities, among other initiatives. In October this year, the US-listed company Greenlane Holdings announced a $110 million PIPE (Private Investment in Public Equity) financing to initiate the B ERA treasury strategy, which includes approximately $50 million in cash and about $60 million worth of BERA tokens, with investors including Polychain, Blockchain.com, Kraken, North Rock Digital, CitizenX, and others. Although this financing itself is substantial, the stock price did not show a significant increase, which is also related to the overall cooling of the DAT sector.