Overview

How Does BGT Market Work?

BGT Market is built to offer the same functionalities that users can access with $BGT in their wallet – claim, delegate/undelegate, claim incentives and rewards, and redeem $BERA – with one additional valuable function: the ability to buy and sell $BGT via a dutch auction mechanism.

When a user buys BGT.m on BGT Market, they are not buying a wrapped token or derivative — they are buying spot $BGT that's soulbound to the BGT Market smart contract. Every BGT.m on BGT Market is a direct representation of 1 spot $BGT in the smart contract.

BGT.m is not a wrapped token or liquid staking derivative; it simply refers to the user's spot $BGT balance deposited in the BGT Market contract, to avoid confusion with the $BGT balance that a user may see on BGT Station. After $BGT is deposited into BGT Market, the dApp frontend will display the user's balance as BGT.m.

When a user claims $BGT from BGT Station into their wallet (EOA), the $BGT is then soulbound to that wallet account — you can't transfer that $BGT to another wallet anymore.

So instead of claiming $BGT into externally owned accounts, BGT Market essentially enables users to claim $BGT directly into a smart contract (hence the $BGT is soulbound to the smart contract)

BGT Market employs an on-chain accounting system to attribute and account $BGT balance to specific users and their wallet addresses, with full utilities on delegation, rewards, and redemptions. So when an individual user claims $BGT to BGT Market or purchases BGT.m on auction, the BGT.m balances are recorded on-chain, attributed to their wallet address.

Only the owner of the BGT.m balance can initiate and execute transactions such as delegation, undelegation, rewards redemption, $BERA redemption, and auction participation. There is no admin functionality or permissions to initiate or overwrite $BGT transactions.

Note: If you have claimed your $BGT into your wallet (EOA), you will not be able to transfer it to BGT Market for auction purposes.

How Does The Dutch Auction Work?

Each auction lot on BGT Market has a fixed capacity of 100.00 $BGT. Once a lot reached capacity– whether filled by a single or multiple sellers–the Dutch auction will instantly commence. A new auction lot will then be automatically opened for further contribution.

The Dutch auction initiates with a high initial offering price which declines rapidly at first, then at a decreasing rate as time progresses. This pricing mechanism ensures that the rate of price reduction slows down over time.

We anticipate two primary groups of buyers on this market: (1) those who see high value in owning $BGT and are willing to purchase regardless of price, and (2) those seeking arbitrage opportunities. The auction's pricing mechanism—starting high, declining rapidly, and then slowing—aims to maximize price discovery. The first group is likely to acquire $BGT at the higher initial prices, while the second group benefits from the opportunity to acquire $BGT at lower prices as the auction progresses.

The auction's starting offering price is set at 690 $BERA and will decrease to 69 $BERA over an approximate duration of 8 hours. Upon the purchase of a lot, the settlement price will be split proportionally among the sellers with the same transaction, after deducting a 3.3% protocol fee. The purchased $BGT will then be credited to the buyer's balance.