The PoL cycle

The most important part is here.

PreviousWhat is $BGT?NextBGT/Bribes war

Last updated 8 months ago

The PoL cycle

The most important part is here.

Think Proof of Liquidity of it as a cycle, similar to a cycle where $BGT is points emitted by the chain.

These points will pass through the hands of various stakeholders:

(validators -> dapps -> users), ensuring everyone has something to win.

1. How to earn `$BGT`? Gauges.

Users (you and me) will earn $BGT by providing liquidity to certain whitelisted smart contracts. They're also called: Gauges

For example:

$BERA/$HONEY pair of a DEX is whitelisted for $BGT rewards
You put your $BERA in
You earn $BGT because you provide liquidity, the "Proof of Liquidity"

Other examples:

Depositing liquidity in the native Bex for an LP pair that is earning $BGT emissions
Borrowing $HONEY on Bend
Providing $HONEY in the bHONEY vault for Berps

2. But where does this `$BGT` come from?

Intentionally simplified sketch:

Validators secure the network and receive allocations of BGTs.
Validators MUST distribute BGTs between Dapps
Dapps MUST redistribute BGT to users that bring them liquidity
Users can either: - burn their $BGT for $BERA and sell - delegate their $BGT earned to validators and get rewarded in exchange (will explain this below)

Watch the full 'cycle':

3. Users can delegate their `$BGT` instead of burning it

IMPORTANT: Users who delegate their BGTs, will keep the ownership, it's only a delegation. You can unbond them later.

The more users delegate their BGTs to a validator, the more this validator we'll have BGTs to redistribute.

This is the first time validator will play an important role in convincing users to delegate to them:

In fact, if a validator has more $BGT delegated to him, he will be able to distribute even more. As a result, this validator has more power and can earn more from the Dapps because Dapps will remunerate him for it.

4. But why should a user choose which specific validator to delegate his BGTs to?

Because the validators distribute the $BGT to the Dapps that users will use.

So, as a user it's on your best interest to delegate our $BGT to a validator who will give more to our favorite Dapp.

Let's take an example if Uniswap existed on Berachain:

I use Uniswap as my favorite DEX.
I've deposited liquidity to earn $BGT on Uniswap (Gauges)
I know that validator A gives a lot of $BGT to Uniswap.
So I'm going to delegate my $BGT to validator A because I know he'll have more BGTs to give to Uniswap.
Uniswap therefore has more $BGT to distribute to its users (us).
I earn more $BGT.

In the end, BGTs will flow through:

Validators -> Dapps -> Users

Users will have 2 choices:

1) Burn $BGT for $BERA

2) Delegate $BGT to their favorite validators to receive more rewards

Conclusion:

As mentioned, $BGT is not tradable/transferable and cannot circulate other than via the cycle I listed above.

PreviousWhat is $BGT?NextBGT/Bribes war

Last updated 8 months ago

Think Proof of Liquidity of it as a cycle, similar to a cycle where $BGT is points emitted by the chain.

These points will pass through the hands of various stakeholders:

(validators -> dapps -> users), ensuring everyone has something to win.

1. How to earn `$BGT`? Gauges.

Users (you and me) will earn $BGT by providing liquidity to certain whitelisted smart contracts. They're also called: Gauges

For example:

$BERA/$HONEY pair of a DEX is whitelisted for $BGT rewards
You put your $BERA in
You earn $BGT because you provide liquidity, the "Proof of Liquidity"

Other examples:

Depositing liquidity in the native Bex for an LP pair that is earning $BGT emissions
Borrowing $HONEY on Bend
Providing $HONEY in the bHONEY vault for Berps

2. But where does this `$BGT` come from?

Intentionally simplified sketch:

Validators secure the network and receive allocations of BGTs.
Validators MUST distribute BGTs between Dapps
Dapps MUST redistribute BGT to users that bring them liquidity
Users can either: - burn their $BGT for $BERA and sell - delegate their $BGT earned to validators and get rewarded in exchange (will explain this below)

Watch the full 'cycle':

3. Users can delegate their `$BGT` instead of burning it

IMPORTANT: Users who delegate their BGTs, will keep the ownership, it's only a delegation. You can unbond them later.

The more users delegate their BGTs to a validator, the more this validator we'll have BGTs to redistribute.

This is the first time validator will play an important role in convincing users to delegate to them:

4. But why should a user choose which specific validator to delegate his BGTs to?

Because the validators distribute the $BGT to the Dapps that users will use.

So, as a user it's on your best interest to delegate our $BGT to a validator who will give more to our favorite Dapp.

Let's take an example if Uniswap existed on Berachain:

I use Uniswap as my favorite DEX.
I've deposited liquidity to earn $BGT on Uniswap (Gauges)
I know that validator A gives a lot of $BGT to Uniswap.
So I'm going to delegate my $BGT to validator A because I know he'll have more BGTs to give to Uniswap.
Uniswap therefore has more $BGT to distribute to its users (us).
I earn more $BGT.

In the end, BGTs will flow through:

Validators -> Dapps -> Users

Users will have 2 choices:

1) Burn $BGT for $BERA

2) Delegate $BGT to their favorite validators to receive more rewards

Conclusion:

As mentioned, $BGT is not tradable/transferable and cannot circulate other than via the cycle I listed above.

For , $BGT can be thought of as points, as they are used by dapps to reward users. (Think Golds on Blast but better)

1. How to earn $BGT? Gauges.

2. But where does this $BGT come from?

3. Users can delegate their $BGT instead of burning it

4. But why should a user choose which specific validator to delegate his BGTs to?

Let's take an example if Uniswap existed on Berachain:

Conclusion:

1. How to earn $BGT? Gauges.

2. But where does this $BGT come from?

3. Users can delegate their $BGT instead of burning it

4. But why should a user choose which specific validator to delegate his BGTs to?

Let's take an example if Uniswap existed on Berachain:

Conclusion:

1. How to earn `$BGT`? Gauges.

2. But where does this `$BGT` come from?

3. Users can delegate their `$BGT` instead of burning it

1. How to earn `$BGT`? Gauges.

2. But where does this `$BGT` come from?

3. Users can delegate their `$BGT` instead of burning it