How Does Infrared Work?
The largest protocol on Berachain, wrapping the chain's unique proof-of-liquidity rewards into liquid tokens (iBGT, iBERA) you can use across DeFi. It manages $1.6B with $16.5M in funding. Its C+ grade reflects deep dependency on Berachain's untested consensus mechanism and validator concentration.
TVL
$50M
Sector
Liquid Staking
Risk Grade
B-
Value Grade
C
Core Mechanisms
3.4.2
iBGT: reward-bearing liquid token representing staked BGT in Berachain PoL
iBGT is the first liquid staking token for Berachain's Proof of Liquidity governance token. Unlike traditional LSTs backed by PoS stake, iBGT represents delegated BGT which itself is earned through liquidity provision — a two-layer abstraction unique to Berachain.
3.4.2
iBERA: auto-compounding reward-bearing liquid staking token for BERA
iBERA follows the standard reward-bearing LST pattern (similar to wstETH/rETH). Value accrues through exchange rate appreciation as staking rewards are compounded. More conventional than iBGT.
3.3.2
Pooled delegation to Infrared-operated validator set on Berachain
Users delegate BERA/BGT to Infrared's curated validator set. Similar to Lido's operator model but on Berachain's PoL consensus. Validator selection is managed by Infrared team.
3.1.1
Pro-rata BGT reward distribution across iBGT stakers with boost for staked iBGT
Only staked iBGT earns boosted BGT rewards. Since not all iBGT is staked (some is used in DeFi), stakers receive amplified yield. This creates a novel two-tier yield structure within a single LST.
7.1.1
Infrared vault rewards: users deposit LP tokens into Infrared vaults to earn BGT via PoL
Infrared vaults abstract away PoL participation. Users deposit liquidity, Infrared routes it through PoL validators to earn BGT rewards. This is a novel vault-as-validator-proxy pattern not seen elsewhere.
2.2.4
Revenue split between iBGT stakers, iBERA holders, and protocol treasury
Standard revenue distribution model. BGT rewards, validator commissions, and protocol fees are split among stakeholders. IR token used for governance over fee parameters.
5.1.1
IR token governance over vault parameters and validator operations
IR token provides governance rights over protocol parameters including vault strategies, fee splits, and validator selection. Standard token-weighted voting model.
1.2.1
IR token vesting with cliff for team and investors from December 2025 TGE
Standard linear vesting with cliff for team and investor allocations. Total supply of 1 billion IR tokens with 210 million in initial circulation.
How the Pieces Interact
iBGT used as collateral in Berachain lending protocols creates reflexive risk: if iBGT depegs, liquidations force more iBGT selling, deepening the depeg in thin Berachain markets.
Users must choose between staking iBGT for boosted rewards or using it in DeFi. This creates unstable equilibria where rational actors oscillate between strategies, causing yield volatility.
Infrared concentrating >30% of Berachain's BGT delegation in its validator set creates centralization risk for the entire chain's consensus mechanism.
If Berachain modifies PoL reward parameters, Infrared vaults may suddenly become unprofitable. The abstraction layer hides this risk from depositors until rewards drop materially.
Governance capture via IR token accumulation could redirect validator operations to benefit large holders at the expense of smaller iBGT/iBERA depositors.
What Could Go Wrong
- Deep dependency on Berachain's novel and untested Proof of Liquidity consensus — if PoL fails, Infrared's entire value proposition collapses
- Validator concentration risk: Infrared operates its own validator set, creating single-point-of-failure for $1.6B in delegated assets
- iBGT depeg risk amplified by thin Berachain DeFi liquidity — a 5% depeg could cascade through leveraged positions across the ecosystem
iBGT Depeg and Validator Concentration Cascade
ModerateTrigger: Berachain PoL rewards decline sharply or a major validator operated by Infrared is slashed, causing iBGT to trade at a persistent discount to BGT
- 1.Infrared validator experiences downtime or slashing event, reducing BGT rewards flowing to iBGT holders — iBGT yield drops below competing validators, triggering redemption pressure
- 2.Large iBGT holders rush to redeem for BGT, but BGT is non-transferable and must be burned for BERA — iBGT/BGT exchange rate breaks 1:1 peg on secondary markets, trading at 3-5% discount
- 3.DeFi protocols using iBGT as collateral trigger liquidations as iBGT value drops — Forced selling of iBGT amplifies depeg to 10%+, cascading across Berachain DeFi
- 4.Confidence loss in Infrared causes withdrawal from iBERA liquid staking vaults — Infrared TVL drops 40-60%, reducing validator power and further decreasing rewards in a reflexive spiral
Risk Profile at a Glance
Overall: B- (32/100)
Lower score = safer