Let's first understand Berachain's token model.

BERA: Gas token. Used for on-chain activities and transactions, transferable and liquid; validators need to stake $BERA to activate nodes and participate in verification.

BGT: Governance token. It can only be obtained by providing liquidity, soul-bound to the acquisition address, non-transferable, non-tradable, and non-liquid; can be used for governance voting and delegated to validators; burn BGT and get BERA tokens 1:1.

HONEY: Native stablecoin backed by the US dollar. The goal is to maintain a $1 peg; eligible collateral (USDC/USDT/DAI...) can be deposited into the vault contract to mint HONEY. Among these three tokens, BGT is the core of the PoL mechanism.

Why do everyone want it? There are roughly four benefits:

1/Can obtain income distribution from officially operated Dapps

2/Can obtain token incentives from Berachain ecosystem Dapps.

3/It can increase your BGT mining efficiency.

4/Participate in governance decisions. To better illustrate these points, let's proceed step by step and start with the simple ones.

🌊️ Earn BGT: How to provide liquidity?

Only the reward vault in BGT Station can allow you to provide liquidity and earn BGT. Please visit this page: https://bartio.station.berachain.com/gauge

There are different token pairs here, and each token pair has a corresponding reward vault. The reward vault is simply a smart contract that receives the user's LP tokens (such as HONEY-USDC) Users need to stake the corresponding LP tokens in the contract and obtain BGT rewards based on the proportion of the staked position.

This is the so-called "users provide liquidity to earn BGT tokens." (For example, the reward vault in the figure below needs to stake NECT-HONEY LP tokens to obtain BGT) There are many reward vaults on BGT Station that can receive BGT, but it does not mean that every vault will receive the same amount of BGT.

For example, in the same period of time, for the same liquidity of $1,000, users can get 1 BGT by staking in Vault A, while they may get 10 BGT by staking in Vault B. If you want to mine BGT more efficiently, you need to pay attention to the following two key factors:

1. The proportion of your staked position in the vault

2. The number of BGT received by the vault The first factor is easy to understand. The higher the proportion of your staked position, the more rewards you will get. What needs to be explained is the second factor - the number of BGT received by the reward vault.

   🤑 Validators, reward vaults and "bribe market"

   Validators work hard, create blocks, and get BGT block rewards. They will split the BGT on hand and send it to the reward vaults of different Dapps according to their own situation. Since this is purely a personal decision of the validator, each vault will naturally receive a different number of BGT emissions. And this number directly affects the number of BGT received by "users who provide liquidity in the vault".

   

   Dapp always wants to have as many BGT as possible in its reward vault, because this can attract more users to deposit, thus making its liquidity better. Therefore, a war for BGT has begun between various applications: Since the emission of BGT is entirely the personal choice of the validator, can I also use tokens to "bribe" the validator to make him prefer my reward vault?

   Even emit most of the BGT to my reward vault? Indeed, it can. Applications/projects can add token incentives to their own reward vaults, which can be HONEY, stablecoins, native tokens or any ERC20 tokens. Then set a transaction order: I added 1 million HONEY to the HONEY-WBERA vault. For every BGT emitted by the validator to my vault, I will give him 1,000 HONEY, and the transaction order will remain open until it is fully traded.