#StrideZone has launched on
#Berachain mainnet, including the first #LST outside of the cosmos: stBGT
Being the first LST outside this ecosystem, there are several nuances that it is important to understand first. Let's take it one step at a time:
BGT Token, what is it?
BGT will be Berachain’s governance token. Validators and their stakers who delegate their tokens will ensure the security of the network and receive staking rewards, in addition to being able to participate in votes that will dictate the future of the project. It is important to note that BGT is non-transferable and non-tradable, unlike its “sister” token BERA.
Why stBGT token?
Stride's LST — stBGT — is intended to make BGT liquid. In other words, this will represent native BGT deposited by Stride Zone on Berachain.
How does stBGT differ from native BGT?
It is transferable: while staked BGT is locked, stBGT is transferable, tradable or usable in
#defi (either in LPs or as collateral);
Higher profitability: due to the DeFi functionalities mentioned in the previous point, you may have higher profitability than if we were to stick to staking rewards alone;
Collecting Rewards: BGT rewards do not automatically appear in your wallet, they must be collected. Stride will do this for you, minting more stBGT.
And how does stBGT work?
Berachain works as Proof of Liquidity instead of the usual Proof of Stake. This means that in order to earn BGT, you will have to initially add liquidity to certain “LP Vaults” that are eligible for rewards. But instead of directly adding LPs to Berachain protocols to receive BGT, Stride will do it, accumulating BGT for you. In the meantime you can start harvesting stBGT and Stride will mine stBGT at a 1:1 ratio to your BGT rewards. The corresponding BGT is then delegated by Stride to network validators, earning additional rewards. In the meantime, you can use your stBGT however you like, whether it’s selling, adding liquidity, or as collateral.
How to get stBGT?
Deposit eligible LP receipts into the Stride vault. You will then reap the BGT rewards which will be automatically converted to stBGT by Stride. Alternatively, you can purchase stBGT directly on a DEX (e.g. by exchanging
$BERA for stBGT).
Is stBGT redeemed 1:1 for BGT or does the conversion rate change over time?
Unlike Stride’s usual LST mechanism (where rewards are automatically added to the starting capital), stBGT will have to be harvested manually. So whenever you choose to harvest, all BGT rewards will be automatically minted into stBGT.
That said, in terms of pure redemption on Stride, the conversion rate will always be 1:1 for BERA, BGT's sister token that is tradable and transferable. On DEXs, it will be subject to market fluctuations so the conversion rate may be different.
How to earn more with stBGT?
Depositing LPs will convert their liquidity to stBGT instead of BGT. There you will be able to use stBGT in LPs (or as collateral) or simply stake it again (yes, it will be possible to stake LST on Stride, with additional rewards).
How will stBGT staking work?
Depositing stBGT will earn additional rewards. While BGT will earn Berachain staking fees or validator bribes, stBGT will direct these rewards to a dedicated stBGT staking contract. This way, only users who deposit into this contract will receive these rewards. Since not everyone will stake their stBGT, the total reward pool will be divided among fewer users, ensuring a higher return for each investor.
Does Stride charge any fee for stBGT?
No, there are currently no plans to collect rewards, deposits or redemptions of stBGT. This may eventually change in the future for operational, safety or sustainability reasons.
Is stBGT audited?
Yes, stBGT smart contracts have been audited by Informal Systems. If new features are added in the future, these will also be audited before release.