Welcoming Infrared Finance To The Archipelago
What is Infrared Finance?
To understand what Infrared Finance does, we need to first understand BGT.
The Berachain Governance Token (BGT) is a non-transferable and illiquid governance token. But this is by design.
By interacting with whitelisted Berachain DApps, users can earn BGT. This BGT can then be delegated to validators. Once delegated, BGT becomes a yield-bearing token as delegators earn yields through BGT inflation, block captured value, gas fees, and bribes.
This is where Infrared and their liquid staking primitive iBGT comes in. While BGT has many benefits, users will prefer a yield-bearing asset that is also liquid and composable.
By depositing Proof-of-Liquidity (PoL) assets with Infrared, users can earn iBGT (which is backed 1:1 with BGT). The benefit of iBGT is that users can earn boosted staking yields plus participate in various different opportunities on Berachain.
Kodiak x Infrared Finance
As you can see, Kodiak’s partnership with Infrared will be two-fold:
- Treasury Flywheel
- Community Flywheel
For the Kodiak Treasury, Kodiak will bribe various Infrared gauges, which will help increase the BGT reward weights on the specific BGT whitelisted Islands (Kodiak’s automated liquidity management vaults) with protocol-owned liquidity. Simultaneously, Kodiak will mint and/or deposit its protocol-owned Island LP tokens in the corresponding Infrared vaults. If the LP tokens are minted, Infrared will handle liquidity provision back into Kodiak’s Islands.
This will allow the Infrared vaults to earn more BGT, and the subsequent rewards in iBGT, IRED (Infrared’s native governance token), and LP fees will be compounded into the Kodiak Treasury.
From the Kodiak community’s standpoint, it looks like this:
Users who provide liquidity to BGT whitelisted Islands can deposit their LP tokens into the corresponding Infrared vaults. Users can also mint LP tokens directly on Infrared, which means Infrared will handle liquidity provision for the user on Kodiak.
Since Infrared holds the LP token, they earn BGT emissions and mint iBGT back to the user. The user can then receive rewards in iBGT, IRED, and Kodiak emissions (native tokens and partner protocol incentives) and LP fees.
Numba go up for the Beras!
The Archipelago Supports the Growth of The Berachain Ecosystem
Kodiak is the native liquidity hub of the Berachain. Our vertically integrated four-product suite is designed to be the foundation of all liquidity on Berachain.
The Archipelago comprises of top protocols in the Berachain ecosystem that are all aligned with the vision of the chain. Everyone will play their part in helping grow and strengthen the ecosystem to help it reach the heights that we believe it can reach.
We are honored to be able to build long-term relationships with some of the brightest minds in this space who want to play a role in the Bera future. We will continue to bring value, utility, and sticky liquidity to all you fellow Beras.
The Archipelago continues to expand.
