Berachain Protocol Frequently Asked Questions
How well does Berachain perform?
Berachain has the following properties:
- Block time: Block times varies, for latest feel free to check it out at Beratrail explorer.
- Transactions per Second (TPS): (Block gas limit (30m) / Avg gas limit per tx (Pending analysis by pool) ) / Block time (5s) = Will be dereived eventually.
- Finality: Instant finality
What is a DEX?
DEX stands for Decentralized Exchange. It is a place where you can buy and sell tokens that lives directly on the chain instead of being run by any one centralized service. This means that all liquidity can be seen directly on-chain, and is verifiably owned by the smart contracts themselves. A $DEX enables you to swap tokens directly from your wallet, as well as allowing anyone to launch their own tokens and provide liquidity.
What is a swap?
A swap is the process of exchanging one token for another. This can be thought of as a buy or a sell, depending on which token you're looking at. For example, if you're looking to buy $$BERA with $ETH, you would be swapping $ETH for $BERA. This is essentially "selling" $ETH and "buying" $$BERA.
How much does it cost to swap?
Each swap has a fee which varies dependening on the fee that was set when the pool was created. Common fees are 0.05%, 0.1%, 0.3% or 1% but you should always check when performing a swap to ensure you are okay with the fee on that pool.
What is liquidity?
Liquidity is the term for the amount of a token that is available to be swapped. The more liquidity a token has, the easier it is to swap that token.
What is a liquidity pool?
Liquidity pools are pairings of 2-8 tokens that liquidity providers deposit tokens into. This enables DEX users to swap between any of the tokens in the pool.
What is a liquidity provider?
Liquidity providers are users who deposit tokens into a liquidity pool. They are rewarded with a portion of the fees that are generated from swaps in the pool.
What is PRR?
PRR stands for Projected Rewards Rate. This is an estimation of the rewards received when depositing in a pool.
What determines the PRR for each pool?
Rewards are determined by two things:
The amount of fees generated by the pool: This is determined by the total amount of swaps that happen in the pool and the fee that is set for the pool. The more swaps that happen, the more fees are generated. The higher the swap fee, the higher amount of fees generated per swap. However, swap fees should be set to a reasonable amount to ensure that users are not deterred from swapping in the pool.
The amount of $BGT emissions going to this pool: This is determined via votes made by the Berachain validators every epoch. Each validator can select which pools they would like to receive $BGT rewards and how much of the total $BGT emissions should go to each pool. The validator's $BGT rewards are determined based on the amount of $BGT delegated to them out of all $BGT delegated in the system. The more $BGT emissions that go to a pool, the higher the PRR for that pool.
What is $HONEY?
$HONEY is the native stablecoin of the Berachain ecosystem. It is a $USDC backed stablecoin, and is used throughout the Berachain ecosystem.
Does it cost anything to mint or burn $HONEY?
In order to ensure stability, there is a small fee taken on every mint and burn of $HONEY. This fee is currently set to 0.5% of the amount minted or burned and can be changed via governance proposals.
Additionally, because minting & burning requires a transaction, there will be a small gas fee in $BERA.
What stablecoins can I mint $HONEY with during Testnet?
There are various USD-pegged stablecoins that can be used to mint $HONEY. Currently, the following stablecoins are supported in testnet:
- stgUSDC
More tokens may be added based on governance.
What is $BGT?
$BGT is Berachain's staking & governance token. That means it is used to secure the network & earn rewards via Proof of Liquidity as well as to vote on governance proposals.
What is a Validator?
A validator can refer to three things:
- A blockchain node being run to validate transactions, produce blocks and come to consensus with other validators in the network
- The entity that owns and operates the validator node
- The blend of points #1 and #2 that manages a portion of Proof of Liquidity & Governance votes
In the case of $BGT station, we're referring to the #3, as $BGT station is here to help you decide which validators you'd like to delegate to.
Why should I delegate my $BGT?
Delegating $BGT allows you to participate in Proof of Liquidity while helping secure the network.
Why should I delegate my $BGT instead of burning it for $BERA?
Rewards are the main reason.
With Proof of Liquidity, you can earn many different types of rewards. More rewards than you can earn on basically any other chain:
- $BGT Inflation
- Block Captured Value
- DEX Fees
- $HONEY Fees
- Perps Fees
- Gas Fees
Learn more about all of these rewards in Protocol Rewards page.
How do I get $BGT?
$BGT is earned by depositing liquidity into trading pairs on the DEX that are earning $BGT emissions.
What is governance?
Governance is the process by which the community decides what changes are made to the Berachain protocol. This includes how the node is upgraded and what parameters are set for various components on the chain.
Once you’ve provided liquidity into an eligible pool in BEX (or some other bgt-generating action like bend etc) how do you get bgt? Will there be an interface that lets you make the call to the contract to claim? Will it be manually sent or somehow reviewed?
In order to receive $BGT for a token, it must first be approved via governance. So someone would put up a governance proposal for the LP token, if it is approved, anyone can execute the proposal tx which will deploy, via the PoLVault Factory Contract, a PoLVault where the staking token is that LP. This PoLVault will be where $BGT rewards are sent and that LP token is staked in order to receive rewards.
GOV - Can only Validators vote on or create proposals?
Anyone with $BGT can propose and vote on proposals.
What is the actual staking token of the network, $BERA or $BGT?
Security -> $BERA, Incentives -> $BGT
Can validators with $BERA alone build blocks? Assuming yes, what do they earn for doing so? Only the priority fees for the transactions in that block? And how would that work if there is no block reward for that block?
Yes, they would only get Txn fees, no $BGT, no Block reward.
Do incentives only go to the validators with $BGT delegated to them? If they are distributed to pools, and not specific validators, how is an incentive distributed across validators who are willing to direct emissions to a pool being incentivized?
Bribe going to the validator is adjusted for the amount of $BGT the validator has.
Can gauges route emissions to a single pool within a dApp, or only the whole dApp?
The dapp can request a PoLVault for any encapsulated thing they want. The encapsulated thing just requires a representative ERC-20 token that users can stake in the vault.
Will the initial stake of $BERA be locked, what length of time, and will the amount fluctuate in accordance to price value?
The initial stake will be locked, as withdrawals will not be enabled at the start of public testnet v2. However, we have upgrades planned that will enable them. The amount required to spin up a validator will not be changed based on token price. However, we do maintain the ability to adjust this via mechanisms.