Reward Vaults

Reward Vaults are smart contracts in which users can stake their Proof-of-Liquidity (PoL) eligible assets to receive $BGT rewards. Reward Vaults are the only way anyone can earn $BGT rewards, and therefore serve the important function of gating entry into the PoL ecosystem.

Reward Vaults are key infrastructure that allows protocols to leverage PoL, enabling teams to incentivize users' actions in exchange for $BGT. A protocol can have multiple Reward Vaults, each with its own PoL-eligible asset to be staked. For example, BEX can have multiple pools earning $BGT, each with its own Reward Vault and respective PoL-eligible asset.

It should be noted that only Whitelisted Reward Vaults are elligible to receive $BGT emissions from Validators.

User Interactions

Staking With A Reward Vault

To receive $BGT, a user must stake the PoL-eligible asset in its Reward Vault. The protocol that deployed the Reward Vault decides how users acquire the PoL-eligible asset to stake. The idea is that protocols would leverage this to attract liquidity or stimulate activity, and in return award users with the asset they can stake in their vault.

1. The user takes some action that results in receiving a PoL-eligible asset, generally referred to as a receipt token.
2. The user stakes the PoL-eligible asset in the corresponding vault.
3. The user earns a portion of all the BGT emitted to that vault.

Earning BGT

The amount of $BGT rewards a user earns from a Reward Vault is a function of:

1. The user's share of total assets staked in the Reward Vault
2. The amount of $BGT rewards emitted to the Reward Vault

After staking assets in a Reward Vault, users are free to claim their earned rewards, add to their deposits, or withdraw their assets whenever they wish.

$BGT farming with Reward Vaults is meant to resemble familiar DeFi actions, providing a low barrier to entry.

$BGT Flow

When a validator is chosen to propose a block, they direct a portion of their $BGT emissions to specific Reward Vaults of their choice. To learn more about how $BGT is calculated in block production, check out the docs on emissions.

Incentives

To understand why validators would choose to emit $BGT to one Reward Vault over another, refer to Incentives in PoL, which discusses how protocols can influence validator behavior with economic incentives.

Vault Creation

New Reward Vaults can be created permissionlessly at https://hub.berachain.com/vaults/create.

Protocols creating Reward Vaults must additionally whitelist their vaults through $BGT governance to be eligible to receive emissions from validators.

Calculating $BGT APR

As a user, if I want to manually verify the BGT APR for a given Reward Vault, the following information is available on chain to do so. The value calculated corresponds to the light blue BGT APR value found on the Hub frontend.

The RewardVault APR is determined by several factors. The components of this APR calculation include:

• rewardRate - The BGT amount added to Reward Vault Staker's total claims per second
• periodFinish - The timestamp when the rewardRate expires
• stakeToken - The token you stake into the Reward Vault
• totalSupply - The total amount of stakeToken staked in the Reward Vault
• Price of $BGT ($BERA) - The assumption is made the price of $BGT is equivalent the $BERA price
• Price of Stake Token

INFO

If the periodFinish timestamp has elapsed no rewards are being emitted. As a result, the $BGT APR is 0%.

The units of rewardRate is denominated as $BGT per second. The above pieces of data allow us to calculate the APR on the Reward Vault in the following way:

The units of rewardRate is denominated as $BGT per second. The above pieces of data allow us to calculate the APR on the Reward Vault in the following way:

$$APR=\frac{rewardRate\times secondsPerYear\times priceOfBGT}{totalSupply\times priceOfStakeToken}$$

This formula provides the current rate that the Reward Vault is crediting depositors with $BGT.

Example

As a concrete example of the above formula, a reward vault with the following values can be used:

Parameter	Value	Normalized
Reward Rate	272490527103681170793308992914391673	0.27249052710368116
Price of $BERA	$7.8	$7.8
Total Supply	598626940947001140289	598.6269409470011
Price of Stake Token	$223,845.58	$223,845.58
Seconds per year	31,536,000	31,536,000

TIP

The rewardRate returned is in gwei and includes an extra precision factor of 1e18, so is effectively in wei. Normalizing it requires dividing by 1e36.

Using the formula above:

$$APR=\frac{0.27249052710368116\times 31536000\times 7.8}{598.6269409470011\times 223845.58}$$$$\therefore APR=0.500204=50.02\mathrm{\%}$$

These values are updated on the Vaults page roughly every five minutes.