Berachain (BERA)

BGT is Berachain’s staking and governance token, used to delegate to validators and vote on governance proposals. BGT is soulbound, meaning that it cannot be bought, sold, or otherwise transferred between addresses – it can only be earned by depositing assets to reward vaults, protocol approved smart contracts that receive BGT emissions from validators. 

BERA is Berachain’s native gas token, used to pay transaction fees on the network. It can be bought on the open market or earned by burning BGT.

A reward vault is a smart contract that is eligible to receive BGT emissions from validators. To earn BGT from a vault, you’ll need to deposit the asset the vault accepts, at which point you’ll be eligible to earn a share of any BGT the vault receives from validators. 

Most reward vaults accept a specific LP token as the deposit asset – to deposit to these reward vaults, you’ll first need to provide liquidity to the pool that issues the appropriate LP token. Once you have the LP token, you can deposit it to the vault and begin earning BGT emissions. 

In addition to the risk of smart contract vulnerabilities, liquidity providers are also exposed to impermanent loss. The risk associated with impermanent loss is highest when providing liquidity for pools containing assets whose prices may move against each other dramatically (e.g., BERA-WETH) and lowest when providing liquidity for pools including only tightly correlated assets (e.g., HONEY-USDC).

By delegating your BGT to a validator, you’ll be eligible to earn rewards from transaction fees, Block Captured Value, and Incentives. The rewards you earn will be proportional to your share of a validator’s delegated BGT. 

Block Captured Value refers to the fees generated by Berachain’s native DEX, stablecoin, and perpetual futures exchange.

In the context of Berachain, Incentives are rewards offered by reward vaults to attract BGT emissions from validators. A validator who directs emissions to a reward vault offering incentives will receive incentive tokens at a defined exchange rate, proportional to the BGT they emit to the vault. 

Not necessarily – validators do not earn BGT emissions directly, they route BGT emissions to reward vaults. To earn BGT, you’ll need to deposit assets to a vault receiving BGT emissions from a validator. 

Not necessarily – You can delegate BGT to one validator and earn BGT by depositing to a reward vault your validator isn’t directing emissions towards, so long as that vault is receiving BGT emissions from some other validator. 

Only a validator’s initial bond can be slashed, delegated BGT is not slashable.