Infrared launches Dutch auction for Berachain 'reward distribution rights'

Infrared, a liquidity protocol built on the Berachain ecosystem, said on the 19th that it has officially launched an on-chain Dutch auction that allows bidders to secure network reward rights using its own token.

The core objective of the auction is to secure emissions of BGT (Berachain Governance Token), Berachain’s governance token. BGT is a key incentive token granted to validators and liquidity providers who contribute to maintaining the Berachain network, and it is non-transferable.

The Dutch auction introduced by Infrared is a system that sells, in a market-friendly manner, the right to determine which pool BGT rewards will flow to. The auction starts at the highest price and proceeds in a descending format in which the price declines linearly over time, ending immediately once someone bids at the current price. Each auction runs for up to 36 hours, and only one emissions slot is sold at a time.

Projects or investors that wish to participate must use Infrared’s native token, IR, as the bidding instrument. Infrared expects the mechanism to formalize and increase transparency in the existing rewards trading market, while significantly expanding real-world use cases for the IR token and creating new revenue streams.

Winners receive a proof token in the form of a 'CuttingBoard NFT (non-fungible token)'. Through the NFT, the winner gains the right for 14 days to freely allocate a specific validator’s BGT reward flow among approved vaults at a desired ratio.

Infrared began its first auction on the 12th, and from the 20th it plans to roll out a dedicated user interface (UI) that will allow winners to easily adjust reward allocation ratios directly.

An Infrared official said, "Our goal is to combine token staking with a Dutch auction to shift liquidity acquisition competition across the Berachain ecosystem to a more transparent, market-based structure," adding, "We will develop it into an economic engine that drives the long-term growth of the protocol and the network."