Davide
@0xdavide
🐻Today a brief focus on the functioning of native tokens on Berachain. Berachain is a layer1 with a different consensus method: delegated proof of liquidity. Berachain Ecosystem has 2 tokens+1 stablecoin: 1) BERA (gas fee) 2) BGT (non-transferable Governance token, obtained by providing liquidity) 3) HONEY (stablecoin) Users deposit liquidity (LP) and obtain BGT. They then delegate BGT to validators (who produce blocks for the network), obtaining rewards. Validators pass the emissions to liquidity pools that return them to users (LP) in the form of BGT. This is a loop. To pay for transactions, BERA is used, which is also used by validators to produce blocks (the base fee, as on Ethereum, is burned. The other part goes to validators as block rewards and to delegators). BGT can be burned 1:1 in exchange for BERA. So through Proof of Liquidity: the BGT delegation token is decoupled from the BERA gas token. Furthermore, BGT can only be earned by providing liquidity and not purchased on the open market.
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Davide
@0xdavide
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