Understanding iBGT and Its Rewards

At the heart of Berachain’s Proof of Liquidity (PoL) mechanism is the Berachain Governance Token (BGT). Unlike typical governance tokens, BGT is non-transferable and illiquid, earned through engagement with native Berachain dapps like the BEX, Berps, etc. Once users earn BGT, they can delegate it to validators, participate in governance, start earning incentives from protocols, or burn it for BERA at a 1:1 rate.

Since BGT plays such a key role in PoL and the Berachain ecosystem, it’s important that we make it as easy as possible to interface with — that’s why we built iBGT. iBGT is a liquid staking solution for BGT that enables users to earn more rewards and protocols to build all new use cases on Berachain.

What is iBGT?

iBGT is a liquid staking solution that wraps BGT 1:1, allowing users to retain many of BGT’s benefits while introducing composability. When users deposit PoL assets into Infrared vaults, they receive iBGT instead of BGT.

This opens up more opportunities for users to engage with the Berachain ecosystem, while still maintaining the integrity of BGT’s design. We’ll explain how it works with an example.

Earning iBGT: An Example

Let’s say there’s a BERA/HONEY liquidity pool (LP) on the BEX that earns BGT emissions. Traditionally, a user would need to provide liquidity, earn both BGT and LP yield, delegate the BGT to a validator for extra incentives, and manually manage the BGT rewards. Plus, since BGT is non-transferable, it’s permanently tied to the user’s address.

With an Infrared vault, this process is mostly abstracted away for the benefit of the user. Users can simply deposit liquidity into a BERA/HONEY LP vault and earn LP yield, while automatically receiving iBGT. From there, they can use iBGT to explore other opportunities by engaging with the numerous dapps building onBerachain.

Users can also choose stake their iBGT to earn the yield associated with the underlying BGT, including vote incentives and rewards from native dapps (e.g Berps).

Benefits for the Berachain Ecosystem

While the benefits for users are clear, iBGT also brings value to dapps building on Berachain. On testnet we’ve seen iBGT used in various ways — sometimes enabling new use cases, other times making existing use cases more dynamic.

By making BGT more composable while retaining its yield-earning potential, iBGT allows protocols to pass these benefits directly to their users. Here’s what the the iBGT ecosystem looks like pre-mainnet:

Building on top of iBGT puts you in good company. If you’re interested, check out our documentation.

Looking to Mainnet

As we approach mainnet, iBGT’s presence on testnet continues to expand. Users can try out the system and explore various integrations on bArtio. If you have feedback or questions, feel free to reach out in our Discord.