What is Infrared Governance Token (IR)?

Quick Facts

• Native token of Infrared Finance on Berachain
• Powers protocol governance via a Delegated Incentive System
• Stake IR to receive sIR, which grants fee rewards and voting power
• Protocol issues two liquid staking tokens: iBGT and iBERA
• Performance fees redistributed to IR stakers as real yield
• Buyback mechanism called the Red Fund supports ecosystem growth
• Token distribution includes ecosystem, contributors, investors, and Berachain Foundation

Introduction

Infrared Finance is a DeFi protocol serving as core liquid staking infrastructure for Berachain. Its native governance token, IR, sits at the center of the protocol's incentive and decision-making architecture.

IR enables holders to shape how the protocol evolves while earning a share of the revenue it generates, aligning long-term incentives between users and the protocol itself.

History & Background

Infrared Finance was built specifically to serve Berachain's unique Proof of Liquidity (PoL) consensus model. Berachain's design requires liquidity participation to earn governance rewards, but this created complexity for everyday users.

Infrared emerged to abstract that complexity, becoming one of the leading protocols by total value locked (TVL) on Berachain after the network's mainnet launch.

How Infrared Governance Token Works

The IR token operates through a Delegated Incentive System. When users stake IR, they receive sIR — a staked representation that grants two core benefits: a share of protocol fees and the ability to delegate governance influence over the protocol's incentive flows.

The system contains two sets of vaults: one for individual users and one for protocols. This dual-vault design allows both retail participants and DeFi protocols to engage with Infrared's governance layer at different scales.

Tokenomics

IR's economic design prioritizes long-term alignment. The ecosystem allocation unlocks partially at the Token Generation Event (TGE) with the remainder vesting linearly over 24 months. Core contributors, investors, and the Berachain Foundation face a one-year cliff before any unlock, followed by a 24-month linear vest.

A portion of protocol fees is directed to the Red Fund, which buys IR tokens from the open market to fund community initiatives — creating a potential deflationary pressure and recycling value back into the ecosystem.

Ecosystem & Use Cases

IR is the governance and incentive anchor for Infrared's broader product suite. Key ecosystem products include:

• iBGT — a liquid, freely tradable wrapper for Berachain's soulbound BGT governance token
• iBERA — a liquid staking token backed 1:1 by BERA, usable across lending, borrowing, and trading
• PoL Vaults — one-click smart contracts that automate liquidity delegation and reward compounding

By holding IR and staking for sIR, participants receive BGT rewards captured by Infrared's validator infrastructure, creating a direct revenue-sharing model.

Team, Governance & Community

Infrared operates as a DAO, with IR holders voting on critical protocol decisions including validator selection, fee structures, and treasury management. The Berachain Foundation (Build-a-Bera) holds an allocation and has committed to holding it indefinitely, signaling long-term ecosystem alignment.

The protocol's community is active on Discord and Twitter under the handle @InfraredFinance.

Advantages

• No entry or exit fees — users can join and leave PoL vaults freely
• Real yield — protocol revenue is shared directly with IR stakers
• Simplified PoL access — one-click vaults remove technical barriers
• Capital efficiency — liquid staking tokens (iBGT, iBERA) remain usable across DeFi
• Aligned tokenomics — vesting schedules and buybacks discourage short-term speculation

Risks & Challenges

• Berachain dependency — Infrared's success is tightly coupled to Berachain's broader adoption
• Smart contract risk — complex vault and staking mechanics introduce potential vulnerabilities
• Governance concentration — early vesting cliffs mean insiders hold significant influence initially
• BGT peg risk — iBGT's value relies on assumptions about redeemability and liquidity depth

Long-Term Vision

Infrared aims to become the essential yield infrastructure layer for the entire Berachain ecosystem. By deepening liquidity, growing the validator set, and expanding DeFi composability through its liquid staking tokens, the protocol seeks to create a self-reinforcing flywheel of growth.

As Berachain matures, IR is designed to capture increasing value from the protocol's growing fee base, rewarding committed governance participants over the long term.