# iBGT as collatoral

Beraborrow leverages `iBGT`, a liquid version of the Berachain Governance Token (`$BGT`), as a collateral asset within its protocol.  When providing liquidity on Berachain users earn `$BGT`, which is non-transferrable, and can either be used for governance or redeemed for `$BERA` tokens. By Staking LP positions with Infrared, `$BGT` emissions are made liquid to be used throughout the Berachain DeFi ecosystem. Read more [here](https://infrared.finance/)

### Staking `iBGT`

1. When users deposit `$iBGT` into Beraborrow, the asset is atomically staked with Infrared. This means that the `$iBGT` is staked with Infrared in the same transaction that it is deposited into Beraborrow and and `$siBGT` is kept in the`Den.`By staking the `$iBGT` users are able to earn additional yield on their holdings, essentially being paid to borrow. Simultaneously, the deposited `$iBGT` frees up liquidity through the minting of `$NECT`, which can then be utilised throughout various Berachain DeFi applications.

<figure><img src="https://1570492309-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FffzDCMBDa391vIMqruBP%2Fuploads%2FTyLEaBHIakoKNs6oQIlC%2FIMG_A9C4A505C46E-2.jpeg?alt=media&#x26;token=ac5f0b85-d3ed-454f-93eb-a132f49e43dd" alt=""><figcaption><p><code>iBGT</code> that was deposited into Den staked with Infrared</p></figcaption></figure>

2. When a user looks to redeem their position the `$siBGT` is unstaked for `$iBGT` in the same transaction and `$iBGT` is withdrawn from Infrared directly to the users wallet.

<figure><img src="https://1570492309-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FffzDCMBDa391vIMqruBP%2Fuploads%2Fd5nNQgQ4iZzxbIREtSR6%2FIMG_A9C4A505C46E-1.jpeg?alt=media&#x26;token=1b364c48-1900-4ca1-b0e7-45fbb8b6645d" alt=""><figcaption><p><code>siBGT</code> in beraborrw </p></figcaption></figure>

By using `$iBGT` as collateral, Beraborrow ensures that users can maintain exposure to `$iBGT`, earn yield all whilst maintaining Governance power in the Berachain ecosystem.&#x20;