Participating in Proof of Liquidity has its perks and those are rewards.
How to Get Rewards
Proof of Liquidity generates rewards for BGT holders. These rewards are generated from various actions on-chain, and are distributed to BGT holders based on their delegated BGT.
Types of Rewards
We'll categorize these rewards as follows:
- BGT Inflation
- Block Captured Value
- Gas Fees
New BGT is created every block based on the inflation rate of Berachain. This BGT is sent to the liquidity providers of certain BEX pools based on the total amount of new BGT emissions voted towards them by validators this epoch.
Block Captured Value
These are fees that come from the native DApps of Berachain: BEX, Honey, Perps.
Certain transactions within each of these DApps will incur a fee that is passed on as the Block Captured Value (BCV). This means that any time a validator includes one of these fee-incurring transactions in their block, they’ll be earning that fee as a reward.
Validators take a % of the BCV via commission, then the rest is passed onto BGT delegators.
When a user performs a swap, a % of the swap fee will be taken as part of the BCV.
When users move between USDC → Honey or Honey → USDC, there is a fee taken. This fee is used to help buffer the peg, however, a portion of this fee will be taken as BCV.
The Perps exchange takes fees from a variety of different transactions that a user takes. These fees are then given out as BCV.
These are the traditional EIP-1559 fees that Ethereum has. When a user submits a transaction, there is a base fee & a priority fee. The base fee is burned, and the priority fees are a “tip” to the validator and their delegators.