An example of a database.yml configuration I'm currently using.

database.yml

default: &default
  adapter: postgresql
  encoding: utf8
  pool: <%= ENV.fetch("RAILS_MAX_THREADS", 5) %>

local: &local
  <<: *default
  host: <%= ENV.fetch("PGHOST", "localhost") %>
  username: <%= ENV.fetch("PGUSER", `whoami`.strip) %>
  password: <%= ENV.fetch("PGPASSWORD", "") %>

development:
  <<: *local
  database: app_dev

test:
  <<: *local
  database: app_test

staging:
  <<: *default
  url: <%= ENV['DATABASE_URL'] %>

production:
  <<: *default
  url: <%= ENV['DATABASE_URL'] %>