KEY TAKEAWAYS
- Stride is launching stBGT, a liquid wrapper for BGT, to enhance its utility as an economic asset on the Berachain mainnet.
- stBGT allows users to stake, trade, and use the token as collateral, addressing the limitations of the non-transferable BGT.
- Users can acquire stBGT by purchasing on BEX or by providing liquidity on Berachain, which offers new opportunities for token utilization.
- The introduction of stBGT is expected to increase the prominence of liquid wrappers as BGT becomes scarcer due to its conversion limitations.
Stride is preparing to launch its new liquid wrapper, stBGT, in conjunction with the upcoming Berachain mainnet launch. This development aims to transform BGT, the governance token for Berachain, into a more versatile economic asset.
BGT, while essential for governance, is non-transferable and cannot be traded or used as collateral. It can be staked or converted 1:1 to BERA, but once converted, it cannot revert to BGT. This limitation has led to the creation of stBGT, which offers additional functionalities.
stBGT: Expanding BGT’s Utility
Stride’s stBGT allows users to stake, trade, and collateralize the token, as well as provide liquidity in an incentivized stBGT/BERA pool. Unlike traditional liquid staked tokens, stBGT does not automatically earn staking rewards, and its value remains constant relative to BGT.
There are two primary methods to acquire stBGT. The first is through purchase on BEX, as BGT itself cannot be bought. The second method involves earning stBGT by providing liquidity on Berachain and depositing LP tokens in a Stride LP vault. This process allows users to claim stBGT in exchange for BGT earned through liquidity provision.
Use Cases and Future Prospects
stBGT offers several use cases, including staking through the Stride stBGT staking contract, providing liquidity in the stBGT/BERA pool, and serving as collateral for borrowing. The stBGT/BERA pool is incentivized with Stride points, and future BGT incentive emissions are anticipated.
As BGT becomes increasingly scarce due to its non-transferable nature and conversion limitations, liquid wrappers like stBGT are expected to gain prominence. The scarcity of Berachain tokens is projected to follow a hierarchy, with HONEY, BERA, BGT, and liquid wrapped BGT becoming progressively rarer.
For more information on Stride’s expansion to Berachain and the introduction of stBGT, visit the official announcement here.
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