Overview

How does BGT Market work?

We built BGT Market to offer all 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 an auction mechanism.

Instead of claiming into their wallets, users can claim their $BGT directly into BGT Market by approving our contract via the dApp frontend, similar to how users would normally approve spend on a typical ERC-20 contract.

After $BGT is deposited into BGT Market, the dApp frontend will display the user's balance as BGT.m. BGT.m is not a wrapped token or new token contract; 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.

All $BGT held within the depository contract is attributed and accounted towards a specific user and their wallet address, with full utilities on delegation and $BERA redemption. Once a user claims $BGT onto BGT Market, the BGT.m balances are recorded on-chain, attributed to their wallet address:

• Float Balance: $BGT that has not been delegated nor placed into an auction lot

• Auction Balance: $BGT that have been contributed into an auction lot

• Delegated Balance: $BGT that are actively delegated to validator(s)

Only the owner of the BGT.m balance can initiate and execute transactions such as delegation, undelegation, rewards redemption, $BERA redemption, and auction participation. The smart contracts are designed to ensure that no admin functionality can initiate or overwrite $BGT transactions. This means that users cannot access or perform transactions on $BGT balances assigned to other addresses.

Note: If you have claimed your $BGT into your wallet (EOA), you will not be able to transfer them onto 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 marketplace: (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.