Berachain is one of the most promising DeFi blockchain platforms, gathering much attention due to its unique features. However, making your way around this new ecosystem requires first getting accustomed to some new terms. This glossary explains all the important terms you'll find in the world of Berachain.
Key Takeaways
- Berachain's Proof-of-Liquidity rewards users for providing liquidity.
- $BGT is earned, not bought, and used for governance.
- Reward Vaults are central to earning $BGT.
- $BERA is the gas token, and $HONEY is the native stablecoin.
- The "Bera" community is passionate and active.
If you're interested in Berachain, explore our dedicated section filled with blog posts and comprehensive guides: https://daic.capital/blog/category/Berachain
The Foundation
Berachain
The Layer 1 blockchain, designed specifically for DeFi, built on a unique Proof-of-Liquidity consensus mechanism. Designed to be user-friendly, community-driven, focusing on incentive alignment among users, validators, and dApps.
Proof-of-Liquidity (PoL)
Berachain's unique consensus mechanism. Unlike traditional Proof-of-Stake, PoL rewards users for providing liquidity to the network. This creates a direct link between network security, liquidity, and rewards for all participants.
Gas
The fee, paid in $BERA, required to execute transactions on the Berachain network.
Smart Contract
A self-executing contract whereby the agreement's terms are encoded directly into code so that the actual execution of the agreement is done automatically.
Non-Custodial
A type of wallet or platform wherein the user retains full control over his private keys and assets.
The Tri-Token Model
$BERA
This is the native gas token of Berachain. You'll pay for transaction fees using $BERA when making use of the network, as you do using ETH on Ethereum.
$BGT
The governance token of the Berachain. Unique to it, though, is the fact that it cannot be purchased but instead has to be earned through participation in Proof-of-Liquidity. $BGT gives users the right to vote on proposals and influence the future of Berachain, besides, this token is not transferable.
HONEY
A stablecoin native to Berachain, soft-pegged to the US dollar, which has a broad utility in the trading, lending, and borrowing amongst other activities that happen on-chain.
A more detailed explaination of the Tri-Token Model can be found in our blog post “Berachain Tokens: $BERA, $BGT, and $HONEY”
The dApps and Platforms
BeraSwapBEX (Berachain Exchange)
The main decentralized exchange (DEX) on Berachain for swapping tokens and providing liquidity.
BEND (Berachain Lend)
Berachain's native lending and borrowing platform, where you can lend out your assets or borrow $HONEY against collateral.
BERPS (Berachain Perpetual Futures)
A platform for experienced traders to engage in perpetual futures trading.
Honey SwapHONEY dApp (or HONEY Exchange)
A user-friendly dApp specifically designed for swapping between $HONEY and other major stablecoins.
BeraHub (former BGT Station)BGT Station
A Berachain platform and hub  for all things concerning $BGT. Here you can manage your $BGT tokens and participate in governance.
Learn more about Berachain’s native dApps in our blog post “Navigating the Berachain: Native 'Bear' dApps”
Liquidity Provision and Rewards
Liquidity Pools
Shared reserves of tokens on a DEX (like BeraSwap) that facilitate trading between different assets.
Liquidity Provider
A participant that provides their tokens to a liquidity pool, thus enabling trading and receiving rewards in return.
LP Tokens (Receipt Tokens)
These are special tokens a user gets after providing liquidity to a certain pool. They represent the share of the user in the pool and can be staked in Reward Vaults to earn $BGT.
Reward Vault
A Berachain smart contract in which you stake your LP tokens (receipt tokens) to gain $BGT as rewards. They are the only ways of gaining $BGT.
Find out more about reward vaults in our blog post “What is a Reward Vault? Your Key to Earning $BGT”
APY (Annual Percentage Yield)
The returns that are developed in a year on an investment, including interest on interest, known as compounding interest. In the context of BEX, this most often refers to the estimated return from providing liquidity to a pool.
Governance and Participation
Validator
An entity that helps secure the Berachain network by validating transactions and proposing new blocks. They stake $BERA and earn $BGT.
Staking
A process where participants lock their tokens to contribute to the functioning of the blockchain network. In Berachain, Validators stake $BERA for securing the network, while users stake LP tokens in Reward Vaults and get $BGT.
Delegation
A process of granting your $BGT voting power to a validator, who then votes on your behalf and shares his rewards with you.
Whitelisting
A form of governance in which $BGT holders vote to whitelist a new Reward Vault and its incentive token to become eligible for $BGT emission.
Governance
This is the process through which the community decides on the changes to be implemented in the Berachain protocol. This will range from the upgrade of the node to setting the parameters of various components on the chain.
This glossary covered Berachain-specific terms. If you'd like to deepen your understanding of general staking concepts, we've created a detailed glossary of common staking terminology: Common Staking Terminology Glossary.
The information provided by DAIC, including but not limited to research, analysis, data, or other content, is offered solely for informational purposes and does not constitute investment advice, financial advice, trading advice, or any other type of advice. DAIC does not recommend the purchase, sale, or holding of any cryptocurrency or other investment.
