Berachain has been exposed to have signed a Term Sheet with a Venture Capital firm, allowing the lead investor to make a risk-free investment.
According to Unchained, Layer 1 project Berachain reportedly granted one of its lead investors in the latest B-round funding, hedge fund Brevan Howard's Nova Digital fund, an extremely rare "risk-free" investment clause. The agreement reveals that Nova Digital fund has the unconditional right to request the return of its $25 million investment principal within one year after the Token Generation Event (TGE) of the project.
This disclosure of the special clause comes at a time when Berachain's token BERA has been underperforming in the market, sparking intense questioning from the crypto community and other investment firms regarding the fairness of the project's funding.
Risk-Free Privilege in Venture Capital
Berachain has raised a total of at least $142 million, with its token reaching a valuation of up to $1.5 billion in the B-round funding. This round of funding was co-led by Framework Ventures and Nova Digital fund. However, leaked documents show that Brevan Howard's Nova Digital fund has gained the right to exercise the refund "within the longest one year after the TGE on February 6, 2025."
The financial logic behind this clause is clear and highly skewed: if the BERA token performs well, Nova Digital fund can enjoy substantial returns; however, if the token price falls, the fund can demand a full refund, essentially providing a zero-risk guarantee for its $25 million principal.
Reportedly, a former Berachain employee recalled that the co-founder "Papa Bear" once indicated that Brevan Howard's participation was aimed at enhancing the project's legitimacy. However, other institutions that also participated in the B-round funding, including Framework Ventures, Arrington Capital, Hack VC, Polychain, and Tribe Capital, allegedly were not informed of the existence of this side agreement. Against the backdrop of the BERA token price dropping from $3 at the time of investment to around $1 (a decrease of about 67%), Framework Ventures is facing a loss of over $50 million.
Imminent Potential Repayment Pressure and Legal Disputes
Based on the current price of the BERA token (a decrease of about 66% from the $3 investment price), the Nova Digital fund exercising its refund right aligns with its financial interests. If the fund chooses to exercise this right before the deadline on February 6, 2026, Berachain's fund will face significant financial pressure to raise $25 million in cash to repay the investor. The project documents indicate that the tokens purchased by Berachain investors have a one-year lock-up period, and if Nova Digital exercises the refund right, it may need to forfeit its BERA token allocation.
Currently, the legality of this particular agreement is still in question, especially due to the "secret" terms signed without the knowledge of other investors.
The exposure of this event immediately caused a strong backlash in the crypto community, with community comments largely focusing on the anger towards "lack of transparency" and "institutional vs. retail asymmetry."
Berachain co-founder Smokey the Bera responded on social media, stating that the report was "neither accurate nor complete."
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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions
The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.
There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."
No. The difference lies in where the keys are stored.
In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.
X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.
This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.
The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.
The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.
After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."
From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.
In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.
As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."
Not continuous monitoring, but a clear access point.
For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.
This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.
There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."
X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.
In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.
WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.
X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.
These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.
This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.
X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.
Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.
The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.
X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.
The help page sentence has never been just technical instructions.

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