Integration Guide for DeFi Protocols
This guide outlines the process for integrating BGT Market into your protocol's $BGT
farming flow. For a comprehensive understanding of BGT Market and how it works, refer to previous sections of this document or request for an introductory call.
What is BGT Market
BGT Market is the auction market for spot $BGT
on Berachain.
By leveraging the price disparity between the auction market value and $BGT
's native redemption rate and , BGT Market enables DeFi protocols to unlock higher yields and create more efficient capital flywheels.
Native redemption:
$BGT
can be redeemed at a 1:1 ratio for$BERA
BGT Market: On average,
$BGT
is auctioned at an average settlement price of 1.78*$BERA
*Average price taken over 30 days from BGT Market on bArtio as of December 3, 2024
If your DeFi protocol incorporates $BGT
farming as an essential yield component, BGT Market offers a compelling opportunity to enhance yield generation.
Example: Simple auto-compounder integration
Standard/usual flow
Users deposit LP tokens into a vault via an auto-compounder application
$BGT
rewards earned are redeemed 1:1 for$BERA
via$BGT
token contractResultant
$BERA
is reinvested to compound the LP position
With BGT Market
Instead of redemption, earned
$BGT
is auctioned for higher returnsAdditional
$BERA
surplus acquired via auction boosts compounding, significantly enhancing yields and efficiency
Integration Process
Non-transferable $BGT
: $BGT
must be claimed directly into BGT Market (BGTM) contract. Once claimed into your contract, $BGT
cannot be auctioned.
Step 1: Call setOperator
function
setOperator
function ABI: Available here
Parameters
[bArtio] BGTM contract address: 0x8894D7EE78251cD234A5DDC93a163B467505E3AD
Step 2: Call deposit
function to claim $BGT
to BGTM contract
deposit
function to claim $BGT
to BGTM contractABI: Available here
Step 3: Call contribute
function to deposit $BGT
to the auction lot
contribute
function to deposit $BGT
to the auction lot ABI: Available here
To ensure your
$BGT
balance is deposited to the auction lot, usegetBalance
function to check your balance (ABI here)The minimum contribution amount to an auction lot is 0.05
$BGT
If the deposited amount exceeds the maximum lot size (currently set at 100 $BGT), multiple auctions will initiate automatically.
Step 4: Utilize $BERA
from auction
$BERA
from auctionOnce an auction has successfully concluded, the settled $BERA
is automatically credited to your smart contract. The $BERA
can then be compounded/looped in your protocol's existing product flow.
Key Considerations
Auction Duration Redeeming
$BGT
to$BERA
via the$BGT
token contract is an instant process. However, with BGT Market, the auction completion time may vary based on volume. That said, we do not foresee the total turnaround duration from deposit to completed auction to exceed 12 hours.Time to fill auction lot: An auction will only commence when the auction lot is completely filled; if your
$BGT
deposit does not fill the auction lot, time is needed for other contributors to fill the auction lot.Time for auction purchase: We are using a dutch auction format, which initiates with a high initial offering price and gradually decreases. This means that the duration for an auction to complete is a variable.
Staggered auction lots: If your deposit exceeds 100
$BGT
, it may be split across multiple auction lots. This means that the duration for all the auction lots to complete is a variable.
Price Volatility Redeeming
$BGT
to$BERA
via the$BGT
token contract gives you a predictable and certain conversion rate since it's always at a 1:1 ratio. However, with BGT Market, the auction settlement price may vary with fluctuations in demand.Fluctuations in price premium on Berachain Mainnet: We observed drastic volatility in the settlement price on bArtio testnet. However, we expect the price volatility to be significantly reduced on mainnet.
Price falling below parity: Due to the design of our dutch auction mechanism, it is possible for the settlement price to fall below parity, which means 100
$BGT
can be sold for less than 100$BERA
. However, on mainnet, we do not expect this to happen often.
Protocol Fees Upon the purchase of a lot, the settlement price will be settled instantly among the seller(s) within the same transaction, after deducting 3.3% protocol fee. For example, if your smart contract contributed exactly 100 BGT.m to an auction lot, and it is sold at a settlement price of 150
$BERA
, you will receive (150$BERA
- 3.3%) = 145.05$BERA
.
For further details or technical support, contact our team via Telegram.
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