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Proof-of-Stake blockchains typically have a single token that is used to secure the network through staking and is additionally used for gas, governance, and economic incentives. $BGT and the two-token model bifurcate the first two functions from the latter two. Through Berachain’s two-token Proof-of-Liquidity (PoL) model, the functions of governance and economic incentives (emissions & block rewards) are separated into their own token - $BGT (Bera Governance Token). $BGT is non-transferrable and can only be acquired by engaging in productive activities within the Berachain ecosystem.

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Earning $BGT

$BGT is earned by performing certain actions in dApps with whitelisted Reward Vaults. Most of the time, this is related to providing liquidity, but it is not limited to this. Reward Vault deposits correspond to some form of productive activity on Berachain. Typically, you supply liquidity and receive a receipt token for that activity, which you can then stake in reward vaults to earn $BGT. Some examples include:
  • Depositing liquidity in the native BEX for an LP pair whitelisted to earn $BGT emissions
  • Supplying assets to a lending market and staking the interest-bearing receipt tokens in a reward vault
You can see available earning options at Berachain Hub Pools. You can claim accumulated $BGT from Berahub.

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What can you do with $BGT?

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Governance

$BGT is used to vote on governance proposals. $BGT holders are responsible for a wide variety of ecosystem decisions (see Reward Vault Governance). $BGT holders can either vote on proposals themselves or delegate their voting power to another address. This governance delegation operates independently of boosting validators for controlling their $BGT emissions.

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Earn

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Boost a validator for incentives

You can select validators to “boost” with your $BGT, increasing the validator’s block rewards. The amount of Incentives earned is determined by validators’ aggregate boost. These incentives are returned to the $BGT holders who boosted the validator.

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dApp fees

If you boost validators with your $BGT, you earn a share of Berachain core dApp fees, namely fees from BEX and HoneySwap. This is done via the FeeCollector contract. At a high level, FeeCollector auctions fees collected from dApps for $WBERA and then distributes them pro rata to $BGT holders who have boosted validators.

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Redeem $BGT for $BERA

$BGT can be redeemed (burned) 1:1 for $BERA. This is a one-way function, and $BERA cannot be converted into $BGT. This limits the ability to earn the chain’s economic incentives solely to $BGT holders.