BGT/Bribes war
Last updated
Last updated
As you would have learned from the previous pages.
BGTs are a crucial element for all Berachain stakeholders:
validators
dapps/protocols
users
You also learned that users can delegate $BGT to validators & earn more thanks to the uniswap example in:
To become a validator, you must stake $BERA, and then convince users to delegate $BGT to you.
And finally, dapps need to attract validators to have $BGT... and then to attract users liquidity in their gauges.
So at the end.....
Dapps will convince validators to direct $BGT issuance to them in exchange for a reward, often the protocol's native token.
Example: imagine if Uniswap rewards ETH validators with $UNI
This system is called Bribes.
$BGTAfter a dapp has negotiated with a validator for $BGT issuance thanks to Bribes, that dapp will naturally attract users because it means they have $BGT to redistribute.
The more BGTs Dapps have to distribute, the more users will be motivated to deploy liquidity in their gauges and earn $BGT. Users will sometimes even earn native tokens if a dapp chooses to distribute some.
Because users will be on the hunt for $BGT, providing liquidity to dapps (=gauges) for that.
Users will know which validator supports their favorite Dapp, so they'll delegate more BGTs to him and receive more rewards. See the uniswap example in The PoL cycle
Some validators will redistribute a part of their Bribes (the Dapps' native tokens rewards) to users to thank them for the delegation (& to attract more delegators)
In this dapp they can see everything they need to choose who to delegate their BGTs to.
Read this to finally understand:
The real cabal is to be a dapp + a validator.
That way, your users delegate directly to you, and then you send all the $BGT emissions to your Dapp.
And you start the cycle all over again...
That's what's likely to happen every time. Because it means a dapp doesn't have to give these native tokens to its validator (Bribes), thus losing treasure.
Berachain’s proof of liquidity is points, but better.
Proof of liquidity is a mechanism that incentivizes sticky liquidity through systemic rewards for users who provide productive capital to the ecosystem.
There’s no more free lunch for value extraction on either side.
Any capital provided to the ecosystem is put to work, creating deeper liquidity and, as a result, better execution prices and outcomes for users and dApps.
Proof of liquidity is a dance where validators, applications, and users interact to align financial and social interests through BGT- the governance token emission from the Berachain network.
To earn BGT, users provide liquidity to ecosystem applications.
As a user, BGT gives holders rights to a percentage of the fees generated from native dapp use, influences which reward vaults are incentivized through governance, and can be delegated to a validator to earn a portion of the validator’s incentives.
Users can view & choose their validators in the BGT station (one of the native dapp of Berachain foundation, more info here: )
Bonus: You can also check this from Cami explaining that since validators can receive incentives from dapps in their native tokens and share those incentives with their delegators:
(bozos we must be honest, this conclusion is a copy pasta from Bera docs, gud tech, read all the articles here if u want: )
At the end of the day, BGT allows users who contributed value to the system to determine who should be rewarded the most.
