Bera Governance Token

The YBSTwB VCM captures the value generated by incentivizing BGT holders to actively participate in delegating their BGT to validators; unlocking dual cashflow streams from protocol incentives and core dApp fees.

Firstly, when a user creates a boost (in other words, stakes his BGT tokens), he immediately becomes eligible for reception of a portion of the income generated by the fees of the core Berachain dApps. This income can be supplemented if he delegates his boost to an active validator; this boosts the validator as described on BERA's token page and begets a corresponding additional emission of BGT rewards thereto. These rewards are not captured directly by the validator, however, but are instead funnelled to his chosen Reward Vaults, which in return emit the preset Incentive Tokens (up to two per vault) at a set Incentive Rate, which is nondecreasing whilst the current Incentive Token supply of the Vault lasts.

Of these Incentive Tokens, the validator takes his commission cut, and the rest is distirbuted proportionally to the boosters (the validator himself included).

The Generalized Governance VCM reflects the value derived from the governance rights granted to BGT holders, enabling them to shape Berachain’s ecosystem through active participation in decision-making processes. This mechanism ties BGT’s governance value to the ability to influence the ecosystem’s financial health, such as having power to change native dApp protocol parameters such as the BEX fee level; affecting revenues. In addition, governance power grants holders the authority to oversee the admission of new Reward Vaults into the whitelisted set, making them eligible to receive BGT emissions from validators. To capture this value, BGT holders must engage in governance by performing actions such as creating proposals, delegating voting power, and voting, which are binary indicators of participation.

The Representation VCM captures value through the pricing and transferability provided by BGT’s one-way redemption into BERA, anchoring its worth to BERA’s market value, and providing an off-ramp from its soulbound nature, as otherwise the token is non-transferable. This mechanism allows BGT holders to convert their tokens at a 1:1 ratio, offering a dependable way to transition into a more versatile asset. Linking BGT to BERA’s market value also provides a stable reference point, making BGT a more predictable asset for holders navigating the ecosystem’s tri-token structure, where BERA powers the security layer and BGT drives the reward layer.