🥳 Earning Rewards

Overview of Reward Mechanisms

The Roots protocol offers multiple reward mechanisms to incentivize user participation and maximize returns. Below is a detailed overview of how rewards are generated and distributed:

Staking $MEAD

Staking $MEAD in the Stability Pool allows users to earn rewards from liquidations. When a liquidation occurs, the $MEAD in the Stability Pool is used to repay the liquidated debt, and the collateral is distributed to Stability Pool participants. The surplus (premium) from the difference between the market value of the collateral and the discounted rate at which it was acquired represents the reward for participants.

Earning $BGT and BCV on the Collateral Posted

$BGT (Berachain Governance Token) and BCV (Block Captured Value) are earned on the collateral posted. These are retained by the protocol and staked on users’ behalf with the chosen validator. This staking process allows users to earn additional rewards.

iBGT staking

Users that choose to post iBGT as collateral will receive all the Infrared protocol's emissions assigned to their share of iBGT

Additional Incentives

In the future, the protocol may offer additional incentives for specific activities, such as:

• Posting Specific Assets as Collateral: Incentives for using certain assets as collateral.
• Providing Liquidity to $MEAD-$HONEY Pools: Rewards for providing liquidity to the $MEAD-$HONEY liquidity positions on various exchanges.

By understanding these mechanisms, users can effectively participate in the Roots protocol and maximize their returns.