Infrared PoL Vaults (iBGT)
What is an Infrared vault?
An Infrared vault is a core feature of the Infrared protocol that simplifies the process of staking assets and earning rewards on Berachain. Infrared aims to host as many vaults as possible for use cases on Berachain that receive BGT emissions. By depositing assets into these vaults, users can effortlessly earn BGT in the form of iBGT – and other associated rewards when staked – while the vault interfaces with Proof of Liquidity (PoL) for the user.
Why use an Infrared vault?
PoL is a novel reward mechanism that is exclusive to Berachain, often accompanied by a learning curve and the need for active reward management. Additionally, users who decide to earn PoL’s BGT rewards themselves will earn BGT (not iBGT) and their BGT rewards will be soulbound to their address.
Infrared vaults streamline the PoL user experience and enable users to earn iBGT instead of BGT. This switch not only simplifies things for the user, but also enhances flexibility, allowing vault users to fully realize the value of their BGT rewards.
How does an Infrared vault work?
Liquidity + BGT
Imagine a BERA / HONEY liquidity pool (LP) on the Berachain decentralized exchange (BEX) that receives BGT emissions. To maximize rewards, a user must provide liquidity to the pool, earn BGT and LP yield, delegate the BGT to some validator set for extra incentives, and manage these rewards. Additionally, the earned BGT is permanently tied to the user’s address and is non-transferrable.
LP Staking
With an Infrared vault, this process is simplified. For example, users can deposit their liquidity into a BERA/HONEY LP vault. Over time, they earn LP yield and receive iBGT, a liquid wrapper for BGT. Users can then use their iBGT to earn additional rewards by interacting with core DeFi primitives on Berachain. They can borrow against iBGT, stake it as siBGT, or explore other yield-generating opportunities throughout DeFi.
Delegate to Validator Set
Behind the scenes, Infrared issues iBGT for every BGT earned by the user’s deposited liquidity, ensuring a 1:1 backing (though iBGT is not redeemable for BGT). Infrared then delegates the earned BGT to a validator set, generating rewards for the siBGT rewards pool.
POL in One-Click
This simplified process allows users to maximize their rewards and use their BGT in ways that would not be possible without Infrared.
Why isn't there a vault for my usecase?
It is permissionless to deploy an Infrared LP vault, however for it to be functional the LP token must be approved by Berachains Governance process. If you want to deploy our vaults even before the LP token is approved, you can do so by using our Factory.