bTokens are a tokenized representation of your supplied balance on Brainiac Finance. Each bToken has a unique ERC20 address, which you can view on Godwoken. When you supply an asset to Brainiac, you will receive the equivalent amount of bToken in return. Because interest accrues by the block, it wouldn’t make much sense to constantly distribute payouts. Essentially, bTokens allow users to accumulate interest without needing to have the amount paid out every block.
It works by the underlying assets representing each bToken gradually increasing over time, depending on the market’s Supply APR. For example:
- Assuming a bUSDC/UDSC rate of 0.0204, if you supply 1000 UDSC to Brainiac then you would receive ~49019 bUSDC in return (1000 / 0.0204).
- Let’s say one year later, the bUSDC/UDSC rate has gone up to 0.0215. That would mean your 49019 bUSDC is now worth 1021.5 UDSC (1000 * 0.0215) – an increase of 21.5 UDSC.
One of the benefits of bTokens is that they are transferable and continue to earn interest regardless of where they are held. However, remember that bTokens determine the Borrow Limit of the wallet they reside in. Meaning a transfer of bTokens could lead to liquidation scenarios. We expect to see more use cases for bTokens as the Godwoken ecosystem grows. That’s all you need to know for now! We will continue to update this guide as more Brainiac Finance features go live.