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Polkadot's Inflation: Can Bifrost Popularize DOT Liquid Staking?
Polkadot's Inflation: Can Bifrost Popularize DOT Liquid Staking?
On July 18th, Jonas, a research scientist at the Web3 Foundation, posted on the Polkadot forum suggesting reducing the annual inflation rate of DOT from 10% to 8%, with 15% fixed inflows to the treasury. This is to address Polkadot’s budget crisis and attempt to further revitalise DOT staking and Liquid Staking. Interestingly, since Ethereum’s Shanghai upgrade in April 2023, the market has held high expectations for Liquid Staking in ecosystems like Polkadot, Cosmos, Sui, and Aptos. However, compared to the flourishing ETH/SOL Liquid Staking Token (LST)/Liquid Restaking Token (LRT) track, other blockchains’ staking tracks seem tepid, lacking strong momentum. At this critical moment, Polkadot has launched a reform targeting the inflation rate. Could this be an attempt to force the staking track to develop new variables, and will Polkadot’s Liquid Staking track break through during this challenging time? Polkadot Is Not Alone: High Staking Rate, Low LST Penetration Rate As is well known, Proof of Stake (PoS) chains rely on native token staking to ensure security. Therefore, to incentivize network-wide participation in staking to maintain network security, some PoS chains offer annual staking rewards in double digits or higher, facing high inflation pressure. Polkadot, Cosmos, Sui, and Aptos generally have much higher staking rates compared to ETH. Under high inflation, if token holders do not actively participate in staking, their shares will be gradually diluted by other stakers. According to Staking Rewards data, compared to Ethereum’s approximately 28.58% staking rate, other major PoS chains have staking rates above 50%—Sui at 78.77%, Aptos at 77.44%, Cardano at 62.6%, Polkadot at 58.8%, and Avalanche at 54.89%. Staking Rewards In terms of absolute staking volume, apart from Solana’s unique position with $56.75 billion in staking, Polkadot, Sui, Aptos, Cardano and Avalanche also have staking ecosystems over $3-5 billions, providing the foundation for the further development of the LST track. However, the paradox is that in the current PoS ecosystem, chains like Polkadot face a “high staking rate but extremely low LST penetration” anomaly: DOT has 891 millions staked tokens, valued at over $3.67 billion, but the leading LST protocol Bifrost holds only about 8.563 million DOT, with a total market value of just $35.6 million. This means DOT’s LST share (Bifrost) accounts for only 1% of the total staked DOT volume, with most token holders opting for native staking and nomination pools instead of liquid staking. Assuming Bifrost’s market share remains unchanged, and if liquid staking penetration in Polkadot reaches anywhere around 10%, it would mean Bifrost’s DOT TVL surpasses 55 million DOT, valued over 350 million USD. This scale is sufficient to stimulate the development of DeFi primitives on top of LSTs. This situation of high staking rates and low LST penetration is not unique. Other PoS chains mentioned also face similar issues. The main reason is that the native staking annual yields of new PoS chains are already high enough, but other use cases within the ecosystem are very limited, offering few opportunities and low yields. Even if users hold LST assets, they have limited options for additional yields, reducing the incentive to participate in liquid staking. In contrast, Ethereum’s situation is different, with rich DeFi primitives and composability, LST holders can achieve additional yields through various opportunities. Moreover, with Ethereum’s native staking rate only 3-4%, even a 4% additional yield doubles the original yield, providing more motivation for users to use LSTs. The Great Debate : Polkadot’s Inflation Earlier on in July, several Polkadot ecosystem builders opened up a community-wide discussion regarding the adjustment of the DOT inflation rate and its potential impact on the overall Polkadot network security and DOT staking rate, sharing their perspectives on how to reduce net inflationary pressures. Interestingly, all attendees, including Web3 Foundation research scientist Jonas, Web3 Foundation technical educator Filippo, ChaosDAO co-founder Alice_und_Bob, Mark Cachia founder of Scytale Digital, and Fellowship member Kian, largely support reducing the DOT inflation rate to balance network security, investor interests, and project development needs. As for the specific inflation rate reduction and what kind of dynamic assessment and adjustment mechanism to adopt, everyone has their views. A good tl;dr was made by 0xGoku in this thread, many aspects have to be taken into consideration: Overall, if the maximum DOT inflation rate could be successfully reduced to 5% (i.e., halved), and a flexible parametric mechanism established to adjust the inflation rate according to actual conditions, it might result in some immediate loss of direct income for staking users, particularly large holders. However, from a long-term perspective, this is undoubtedly a significant positive for the entire Polkadot community. Once liquid staking solutions and products building on top of them can deliver significant yield improvements, users’ perception towards LSTs will undergo a significant shift - in terms of diversifying and holding LSTs to have exposure to greater yield scenarios. Thus, if DOT inflation could indeed be halved, it would not only likely promote the prosperity of the Polkadot liquid staking ecosystem but also bring more vitality and innovation to the entire ecosystem, greatly enhancing users’ willingness to use LSTs and driving the development and expansion of solutions building on top of liquid staking, to driving more on chain activity and growth. Can Bifrost’s vDOT Ride the Wave? The idea of reducing the inflation rate will undoubtedly create a “crowding-out effect” on Polkadot’s staking/LST ecosystem: As native yields decrease, users will actively turn to LSTs to seek additional yield opportunities, helping to increase LST penetration, promote more efficient capital allocation, and potentially drive more diverse and rich financial services in the entire Polkadot ecosystem. However, reducing the inflation rate may temporarily affect investor confidence, causing some funds to flow out. Thus, the Liquid Staking products within the ecosystem need to be strong enough in terms of yield and security. For example, Bifrost has shown impressive performance in three dimensions: richer composable yields, multi-layered security guarantees, and comprehensive governance rights inheritance (governance inheritance, airdrop inheritance). Richer Composable Yields Bifrost is expanding application scenarios around vDOT on a regular basis. Besides generating staking yields, vDOT can also be used in lending protocols, DEX, and farming protocols in DeFi to generate multiple yields. Bifrost has launched a leveraged staking product called “Loop Stake” for vDOT and vKSM, allowing users to set and manage leverage based on their risk preferences and complete leveraged staking with vDOT and others in one click. This significantly attracts users, as liquid staking on Bifrost becomes a flexible and leveraged investment. Currently, Loop Stake has attracted over 94,000 DOT supplies and nearly 85,000 DOT borrowing demands, achieving initial results. Ordinary users can also leverage vDOT’s composability across chains to directly use Bifrost Parachain services and liquidity on other Polkadot parachains and more heterogeneous chains. Bifrost actively collaborates with other projects and ecosystems within the Polkadot ecosystem to enhance vDOT’s impact and application range, providing more value to users in the ecosystem, examples of this have been, vDOT being the largest collateral asset on Interlays lending market and for securing their decentralised trustless iBTC vaults as well as vDOT popular usage on Hydration Yield DCA feature allowing users to DCA their DOT staking rewards into other ecosystem assets. Multi-layered Security Guarantees Security is the lifeline of Liquid Staking products. vDOT has established multi-layered security mechanisms to effectively prevent various potential risks and attacks: At the base level, it relies on Polkadot’s shared security as a parachain, with security and anti-reorganization protection provided directly by the relay chain. Bifrost Polkadot chain now has over 32 collator nodes, ensuring network availability and making transactions hard to censor. Bifrost uses XCMP (cross-chain message passing protocol) for cross-chain security protection to ensure trustless, secure and accurate message transmission during cross-chain interactions. Given that staking assets essentially serve as node collateral, there is a Slash risk for node misbehavior. To minimize Slash losses, Bifrost evaluates validator nodes’ yields, leverage (self-staking ratio), and historical credit. In case of Slash risk, it switches nodes immediately to prevent loss escalation. An insurance pool, vToken Vault, is also set aside to cover user losses with 5% of protocol revenue. Bifrost undergoes strict security audits by professional thirty party security teams (Common Prefix, Slowmist, Oak Security) to scrutinize SLP’s code, mechanisms, and operating environment, promptly identifying and fixing potential vulnerabilities. Comprehensive Governance Rights Inheritance ETH doesn’t have governance token attributes, so the governance rights and airdrop inheritance for LSTs have received little attention. However, for PoS chains like Polkadot and Cosmos, which have governance attributes, LST governance rights and potential airdrops eligibility are critical. Bifrost adopts a “governance inheritance” mechanism, allowing vDOT to participate in Polkadot OpenGov governance. This way, governance rights remain with the stakers and are not transferred to the Bifrost protocol. Users who want to participate in governance can liquid stake and use their Bifrost LSTs “vTokens” in governance, balancing decentralized governance and staking yields. During this period, if there are ecosystem project airdrops for DOT stakers, vDOT holders can inherit airdrop eligibility, just like DOT holders: e.g., vDOT holders have received airdrops of Polkadot ecosystem meme tokens $PINK and $DED (even if the DED team sent the tokens on the wrong address). This addresses user concerns, further encouraging staking and governance participation. Users who might hesitate to stake due to fear of losing governance rights and airdrop opportunities are now more willing to stake with such guarantees. Conclusion The prosperity of PoS chain ecosystems like Polkadot depends on the thriving Liquid Staking track. LST is a strategic support and key leverage point for PoS chains to build DeFi niche assets, and create on-chain prosperity, activity and growth : LSTs like vDOT can effectively activate the liquidity of staked assets and introduce a new type of DeFi assets with inherent yield attributes, invigorating the on-chain ecosystem with diverse product forms based on yield rights. While Ethereum’s LST ecosystem continues to evolve, chains like Polkadot are also seeking breakthroughs. As Polkadot begins to implement internal reforms like reducing inflation rates, leading participants like Bifrost might touch key transformation points, triggering a positive flywheel effect.
Research
2024 / 10 / 08 10:00
How Bifrost Grew to Be The Largest Liquid Staking Platform on Polkadot
How Bifrost Grew to Be The Largest Liquid Staking Platform on Polkadot
Liquid staking has emerged as the largest part in decentralized finance (DeFi) by Total Value Locked (TVL), serving as a crucial foundational infrastructure in DeFi. After intense competition, each public blockchain has effectively established its own leading Liquid Staking Token (LST) protocol—for example, Lido on Ethereum and Jito on Solana. Turning our attention to Polkadot, Bifrost stands as the leading LST protocol within its ecosystem. Boasting a TVL exceeding $100 million, it accounts for over 60% of the total TVL in Polkadot’s Liquid Staking Tokens (LST). However, this dominance wasn’t always the case. Bifrost entered the Polkadot LST arena relatively late and initially lacked scale advantages. So how did Bifrost, through steady and strategic progress, achieve such a remarkable turnaround in growth? Let’s delve into its journey. From Zero to One: Exploration and Building On July 15, 2021, Bifrost participated in the Kusama parachain auctions and won one of Kusama’s Top5 slots by raising over 140,000 KSM through its crowdloan. Shortly thereafter, the Bifrost network officially connected to Kusama, becoming a Kusama parachain. Through our continuous upgrades and refinements, the Bifrost Kusama parachain entered the stable operation phase of the mainnet. During this phase, Bifrost built the Staking Liquidity Protocol (SLP), launched vETH, and completed the initial exploration of its LST business. Continuous Expansion and Steady Advancement Between 2022 and 2023, Bifrost successfully won a Polkadot slot auction and migrated most of its operations to the Bifrost Polkadot Parachain. It successively launched six LSTs of parachain asset: vKSM, vDOT, vMOVR, vGLMR, vBNC, and vASTR. During this phase, vKSM became the primary contributor to Bifrost’s TVL. Through several Rainbow Boost events, the total minted volume of vKSM grew from about 50,000 to a peak of around 500,000, and currently stabilizes at around 350,000, with a market share exceeding 60%. What Makes vToken So Attractive? While growth may seem superficial and incentives from operational activities offer only short-term effects, the fundamental reason behind Bifrost’s sustained TVL growth—and its explosive surges when opportunities arise—is its continuous development and accumulation. The suite of extended services that Bifrost has built around vTokens provides holders with greater capital efficiency and flexibility. These extended services include: Node Delegation Strategy and Slash Protection: Based on VBL, Bifrost adopts a flexible node delegation strategy, which allows vToken yields to be slightly higher than competitors. When nodes experience failures or security risks, it automatically switches nodes to ensure that holders’ earnings are not affected. Moreover, Bifrost provides protection against slashing through the BNC Vault. When a slash loss occurs, the funds in the vault are used first for compensation, ensuring that users’ earnings are not impacted. Governance Rights Inheritance: vTokens can be used to participate in OpenGov governance (currently supporting vDOT and vKSM, with more vToken governance support coming soon). For stakers, governance rights always remain in their own hands and are not transferred to the Bifrost protocol. For users who inherently need to participate in governance, staking for vTokens first and then using vTokens to participate in governance allows them to earn additional staking rewards—why not? Rich Applications: All LSTs aim to unlock liquidity, allowing users to enjoy both staking rewards and liquidity. However, the key issue is how users can realize or utilize this unlocked liquidity. Therefore, Bifrost is always committed to expanding the use cases of vTokens. vToken Use Cases Within the Bifrost Dapp, we’ve aggregated various use cases for vTokens. Using vDOT as an example, let’s delve into these possibilities. Swap vDOT can be swapped to DOT at any time thanks to the deep liquidity we’ve established. Beyond the official pool, we’ve provided liquidity on Moonbeam (Stellaswap, Beamswap), Astar (Arthswap), and Hydration to facilitate swaps across these chains. Earn vDOT is inherently an interest-bearing asset, accruing staking rewards from the underlying staked DOT. However, for vDOT holders, this is just one stream of income. vDOT can also generate additional earnings through supported DeFi protocols. Liquidity Provision: Pair vDOT with DOT to create liquidity provider (LP) tokens, supplying liquidity in the official pool or third-party pools like Stellaswap, Beamswap, Arthswap, and Hydration. This allows you to earn LP rewards. Given the minimal price fluctuation between vDOT and DOT, concerns about impermanent loss are significantly reduced. Lending Platforms: Deposit vDOT into Interlay’s lending pool to earn additional interest. Loan Through Interlay Lending, you can deposit vDOT as collateral to borrow other assets such as DOT or iBTC. Looping Strategy: Borrow DOT, stake it for more vDOT, and repeat the process to engage in arbitrage through looping. Diversified Investments: Borrow iBTC to utilize in broader income-generating scenarios across different platforms. Loopstake On March 13, Bifrost launched Loopstake, a leverage staking tool for Polkadot assets (supporting up to 4x leverage). Accessed via the vToken management interface in the Bifrost DApp, Loopstake offers seamless, one-click leveraged staking. Initially supporting DOT and KSM, there are plans to expand to more parachain assets in the future. In summary, we can say: Anything DOT can do, vDOT can do as well; whatever benefits DOT holders have, vDOT holders also enjoy. The same applies to other vTokens, which is why vTokens are favored by stakers! Currently, vTokens hold a dominant market position in the Polkadot ecosystem. Both vDOT and vKSM command over 60% of the market share, and on many parachains, Bifrost serves as the exclusive LST protocol, occupying nearly 100% of the market share. A New Journey: Omnichain LST and vMANTA Due to the interoperable multi-chain structure of the Polkadot ecosystem, Bifrost adopted a different approach from other LSTs when building the vToken module, namely the SLP. In supporting parachain asset LSTs, Bifrost uses its own parachain as the sole protocol hub rather than deploying on multiple chains. When users mint vTokens on other chains, the process involves three steps: cross-chain transfer → minting → cross-chain transfer. For example, when a user deposits MOVR to mint vMOVR on the Moonriver chain, the MOVR is first transferred cross-chain to the Bifrost chain, minted into vMOVR, and then transferred back to Moonriver for the user. We call this the “Omnichain Architecture.” It enables a chain abstraction level user experience, allowing users on other chains to interact with the vToken module on the Bifrost chain to perform remote minting, redemption, swap, and other activities—without the need for intermediate cross-chain steps. This architecture also allows vTokens to derive multi-chain yield combination strategies, achieving maximum capital efficiency. Earlier this year, Manta launched its mainnet. When the Manta chain needed an LST service provider, Bifrost became the preferred choice and received support from the Manta Foundation, primarily because Manta itself has a multi-chain architecture. Manta operates two chains: Manta Atlantic and Manta Pacific—the former being a Substrate chain and the latter an EVM chain. However, Manta aims to avoid ecosystem fragmentation between these two chains. Bifrost’s omnichain architecture allows users on both Manta Atlantic and Manta Pacific to access Bifrost’s LST services locally to mint, redeem, and trade vMANTA. Moreover, applications on both chains can easily integrate vMANTA, providing it with more use cases. This is the unique advantage of the omnichain architecture Currently, vMANTA’s market share among LSTs in the Manta ecosystem has reached over 94%. However, for Bifrost, this is just the first step in its omnichain LST journey. While Bifrost originated from Polkadot, its goal is to leverage the omnichain architecture to provide LST services for more heterogeneous chains—as cross-chain infrastructure matures and trends like chain abstraction and intent-based application development gain traction. There’s still a lot of work to be done!
Research
2024 / 09 / 19 10:00
Bifrost Tokenomics 2.0 Proposal: Allocating 100% of Protocol Profits for BNC Buybacks, with 10% Dedicated to Burn
Bifrost Tokenomics 2.0 Proposal: Allocating 100% of Protocol Profits for BNC Buybacks, with 10% Dedicated to Burn
TL;DR In the Bifrost Tokenomics 2.0 proposal, Bifrost plans to use 100% of protocol profits for BNC buybacks, with 90% allocated to bbBNC holders and the remaining 10% to be burned. Highlights In the second half of 2024, the core mission of the Bifrost Team is to launch Bifrost 2.0. This major update includes several key initiatives: Bifrost will launch its new tokenomics. Complete the cross-chain integration and merging of Bifrost Kusama and Bifrost Polkadot parachains into one. Achieve decentralization of the Bifrost Polkadot Collator set. Ensure compatibility with the EVM ecosystem and establish cross-chain connectivity with Ethereum and its L2. Launch the BNC 2.0 launch campaign. In the field of cryptocurrency, there is a viewpoint that suggests: Tokens are a greater invention than blockchain technology itself. This statement may sound sensational, but it serves as a reminder that tokenomics design is crucial for the success of crypto protocols and broadly for businesses. The Bifrost Tokenomics 2.0 proposal has been released in the community, and the most significant change in the proposal is the introduction of bbBNC (Buy Back BNC). bbBNC, is obtainable by obtaining Bifrost liquid staking token “vBNC” and locking it. Holders of bbBNC receive staking rewards accrued in vBNC, enjoy protocol governance rights, and directly share Bifrost protocol Profits. Bifrost Tokenomics 2.0 Proposal This proposal suggests using 100% of the profits from the Bifrost protocol for the buyback of BNC, with 90% allocated to bbBNC holders and the remaining 10% to be burned. bbBNC, short for Buy Back BNC, is a type of escrow token used for sharing the protocol’s profit. *Protocol Profits = Protocol Revenue - Operation Cost How to obtain bbBNC Users can obtain bbBNC by liquid staking BNC to acquire vBNC and then locking this vBNC to receive bbBNC. The amount of bbBNC a user gets depends on the quantity of vBNC locked and the duration of the locking period. For example, the longer a user locks vBNC, the more bbBNC they receive. This mechanism mirrors the veCRV mechanism in the Curve protocol. In past community activities and Bifrost campaigns, participants earned Raindrops points. After the launch of Bifrost 2.0, these points can be exchanged for bbBNC. These bbBNC will not be minted directly but disbursed from the Bifrost treasury. bbBNC is non-transferable and can be redeemed for locked vBNC upon maturity. However, bbBNC can be redeemed before maturity, but users may face slash for redeeming earlier than the set date. Slash will be fully counted as protocol revenue and will participate in BNC buybacks, burns, and bbBNC incentives. Benefits of Holding bbBNC Holding bbBNC entitles you to the following benefits: Profit Distribution: bbBNC holders will share protocol profits. The distribution proportion depends on the amount of bbBNC held and the length of the locking period. The larger the holding and the longer the lock-up period, the higher the share of the profit distribution. Staking Rewards: bbBNC, obtained by locking vBNC, integrates the staking rewards from liquid staking BNC. Governance Rights: bbBNC inherits the governance rights of BNC, allowing holders to participate in the governance of the Bifrost protocol. Boosted farming: bbBNC holders can receive additional incentives when participating in vToken farming. Sources of Bifrost Protocol Revenue As a leading cross-chain liquid staking protocol, Bifrost generates multiple streams of protocol revenue, including: vToken Commission: The protocol earns a commission from staking rewards through its liquid staking services, which are then transferred to the protocol treasury. This is a significant part of Bifrost’s revenue. System Staking: This is generated by staking assets within the Bifrost system account. Tx Fee: As an independent app chain, Bifrost charges gas fees for transactions on the Bifrost chain. A percentage of these fees is allocated to the Bifrost treasury. vToken Swap Fees: Bifrost establishes liquidity pools for vTokens. Users pay fees when using these pools to swap vTokens. Most of these swap fees go to liquidity providers (LPs), and a portion will be shared with bbBNC holders. Expanded Application Revenue: Bifrost will also launch various extension application services centered around liquid staking, including LST leverage staking (Loop Stake). Users utilizing these services will generate revenue for the Bifrost protocol, thereby providing returns for bbBNC holders. bbBNC Early Redemption Slash: If bbBNC is redeemed before maturity, a certain slash will be incurred, and the slash will be fully allocated to protocol revenue. The Significance of bbBNC for the Bifrost Protocol In the current Bifrost Tokenomics, the main revenue of the protocol enters the treasury and is directly used for business expansion (such as vToken minting incentives, liquidity incentives, channel incentives, etc.). This model has played a role in promoting Bifrost’s business growth, but it has not provided direct benefits to BNC holders. In the Bifrost Tokenomics 2.0 proposal, it is assumed that 40% of staking BNC be converted into bbBNC. Based on the current revenue scale of the Bifrost protocol and the price of BNC, the annualized yield for holding bbBNC could exceed 100%. Higher BNC value capture leads to a higher market capitalization for Bifrost, which in turn drives more LST application scenarios. More application scenarios will promote an increase in the comprehensive yield of vTokens (staking yield + vToken restaking yield), resulting in more vToken minting. More vToken minting means more protocol revenue, which will enhance the returns for bbBNC holders, further capturing more value for BNC and forming a positive growth flywheel. bbBNC serves as the engine of this growth flywheel, aligning the interests of token holders closely with those of the Bifrost protocol and providing greater motivation to contribute to the co-development of the Bifrost protocol. Bifrost 2.0 Roadmap The Bifrost 2.0 upgrade has officially launched. Below is the ongoing roadmap. You can join Bifrost Discord community to get the latest updates or participate in the proposal discussions on the Bifrost Tokenomics 2.0 in the gov-discussions channel. Summary DeFi protocols are among the few crypto market sectors that have successfully achieved Product-Market Fit (PMF), with many demonstrating stable profitability. However, DeFi protocol tokens have primarily served as governance tokens, giving holders no share of the revenues generated. These tokens should represent total equity, not just governance rights. We believe that as the community becomes more aware, the market shifts from financial nihilism to value investing, and regulatory policies become more explicit, sharing profits with token holders will become the norm for DeFi protocols. Examples like Uniswap announcing revenue sharing with UNI holders and Bifrost introducing bbBNC in its new economic model are responses to this trend. Founded in 2019, Bifrost has matured through two market cycles, refining its product and operational strategies to achieve stable business and revenue generation capabilities. With its pioneering efforts in chain abstraction, Bifrost has enormous growth potential. As more capital flows into the ecosystem, the protocol’s value and revenue will continue to rise. The launch of bbBNC will officially lead Bifrost towards community governance and community sharing, establishing a robust and resilient protocol.
Announcements
2024 / 08 / 13 08:00
Unlocking the Potential - Final Chapter: The Feedback and Growth Potential of Bifrost
Unlocking the Potential - Final Chapter: The Feedback and Growth Potential of Bifrost
Since its launch, Bifrost has garnered a substantial user base. Many participants on X who use Bifrost as their staking solution have shared their staking experiences, offering the most authentic insights and perspectives. Some users have reported using vDOT to engage with other DeFi platforms, achieving annualized yields of over 40% on DOT. For DOT holders, this strategy is among the most lucrative. By liquid staking your DOT on Bifrost, you receive vDOT, which can be used in different DeFi protocols, enabling users to secure higher returns and benefit from airdrop rewards. Engaging with Other Ecosystems While Holding DOT This user provides the optimal solution and providing suggestions where users can utilize their vDOT tokens. Another user, after comparing staking services on Polkadot, highly recommends Bifrost. The primary reason is Bifrost allows for quick redemption without the 28-day waiting period. This makes it the ideal choice for users who prefer not to hold DOT long-term but still want to stake, especially during favorable market conditions. Such endorsements are plentiful; in fact, Bifrost’s $100 million Total Value Locked (TVL) is backed by the endorsement of nearly 10,000 staking users. Growth Potential of LST on New Public Chains Most teams are focused on the development opportunities for LST on Ethereum, given that ETH’s staking rate is only 26%, which offers significant room for growth compared to other public chains where staking rates often reach 60%. However, what most overlook is the penetration rate of LST, i.e., the proportion of staking through the LST protocol among all staking activities. On Ethereum, LST boasts a penetration rate as high as 48%, whereas on most other public chains, this rate is less than 5%. Data Source: Staking Rewards The penetration rate is calculated based on the TVL of major staking projects. The data for Kusama is uncertain. The primary reason for this phenomenon is the relatively inactive DeFi ecosystems on public chains other than Ethereum. LST assets lack diverse use cases, reducing the incentive for users to mint LST. This is also why Bifrost focuses on expanding application scenarios for vTokens, to provide as many use cases and user incentives as possible. DePIN+ LST Opportunities Besides PoS networks, there exist staking scenarios within DePIN networks as well. In a sense, we can understand PoS networks as a specific case of DePIN networks, offering generalized computing services. Narrowly defined, DePIN networks refer to specialized IoT networks providing storage, bandwidth, energy, communication, and dedicated computing services. As an important use case of blockchain technology, the development of DePIN networks is crucial. DePINs explore new productive relations that better suit the productivity developments of the information age in human society. In this trend, Bifrost aims to integrate hardware networks with finance, allowing hardware resources to become assets in DeFi with enhanced liquidity, thereby creating new value. Bifrost has taken the first step by launching vFIL. LST for DePIN will be a significant direction for Bifrost’s expansion. For a detailed exploration of Bifrost’s perspective on LST for DePIN, you can find more in this article: LST & Hardware Networks: Bifrost Opens A New Era of Liquid Staking. Multi-Chain Landscape and Chain Abstraction Today’s crypto world is a chaotic landscape composed of multiple chains. Once, Ethereum dominated the majority of liquidity and DeFi applications in the crypto world, but now its TVL share has dropped to below 60% and continues to decline. Some EVM-compatible chains and new public chains are steadily eroding market share. Faced with this situation, Ethereum is undergoing self-evolution to enhance performance and ecosystem scalability, including the Constantinople upgrade and support for various Layer2 solutions. In response, Bifrost has a fundamental insight: the future of the crypto world will continue to evolve towards a multi-chain landscape, where DeFi protocols should adopt new paradigms. While the multi-chain competition drives blockchain innovation and adoption, it also segregates applications, assets, liquidity, and users across different chains. Although cross-chain bridges facilitate migration between chains, they do not reintegrate these elements into a cohesive whole, which a full-chain architecture can achieve. In a full-chain architecture, Bifrost deploys its main protocol on the Bifrost Polkadot chain and lightweight modules supporting remote access on other chains. This setup enables remote minting, redemption, and exchange scenarios. In simpler terms, Bifrost utilizes the Bifrost Polkadot chain as a modular settlement layer for full-chain LST, using a unified main protocol to manage cross-chain interactions and operations remotely across multiple chains. The full-chain architecture also grants Bifrost better cross-chain composability. Similar to how Loop Stake allows remote calls to multi-chain lending pools, Bifrost’s compositional yield strategies will not be limited to single-chain strategies but can fully leverage the entire DeFi ecosystem to create cross-chain compositional strategies. In a full-chain architecture: Users no longer need to concern themselves with where programs are deployed, or where assets and liquidity reside; instead, they view the entire chain as a cohesive whole, freely utilizing all programs, assets, and liquidity, thereby achieving unprecedented convenience and capital efficiency. Developers no longer need to choose sides or redundantly deploy instances across multiple chains to avoid missing out on users. They can deploy programs and liquidity in the most suitable location, allowing full-chain users to access them. Interoperability between applications is no longer limited by chains but can be freely integrated across chains. We can use “chain abstraction” to describe this state. As the crypto industry evolves, “chain abstraction” will undoubtedly be the ultimate goal of the multi-chain landscape. Although it requires coordinated efforts across the industry, pioneers like Bifrost will reap the dividends of this evolution. Conclusion Bifrost has accumulated years of experience in protocol maturity and security. In anticipating trends and taking proactive actions, Bifrost consistently leads the way. While currently, most of Bifrost’s resources and TVL come from the Polkadot ecosystem, leveraging a full-chain architecture, Bifrost is expanding its LST business uniquely and pioneering cross-chain usage scenarios for vTokens. With innovations like Ethereum’s LSTFi model and improvements in cross-chain infrastructure, new public chains will experience rapid growth in penetration and DeFi integration rates.
Research
2024 / 08 / 03 03:00
Fundamental
vDOT - Benefits and Use Cases of Bifrost’s Flagship Liquid Staking Asset
vDOT - Benefits and Use Cases of Bifrost’s Flagship Liquid Staking Asset
With the recent expiry of the first Polkadot parachain lease periods and the unlocking of a large amount of DOT, over 3.3 Million DOT have been minted into Bifrost’s liquid staking solution for staked DOT - vDOT, with a total value reaching 18 million USD. The Polkadot Unlock Harvest campaign incentivizes users to mint vDOT with their DOT. Users receive points, Raindrops, for each vDOT minted. More specifically, users receive primary DOT staking rewards and a share of the bonus pool of 500,000 BNC - worth over $150,000. The percentage of rewards a user gets depends on the number of raindrops they have accumulated. The campaign started on October 24th and will run until November 22nd. For detailed rules, please refer to the article: “Polkadot Unlock Harvest - Rules and Rewards of the upcoming Bifrost Event”. Bifrost offers users a competitive earning APY for staked DOT through dynamic validator selection and also offers users more ways to maximize their capital efficiently with compelling use-cases throughout the Polkadot ecosystem. The sum of the basic yield of staking (Base), combined with the expected yield from the Polkadot Unlock Harvest event’s prize pool (Raindrop) and the vDOT/DOT Farming pool, results in a comprehensive annualized yield of vDOT currently exceeding 44%! Why Choose vDOT? As a liquid staking token (LST) for staked DOT, vDOT has the following advantages: The first LST to retain governance rights of the original chain: vDOT supports Polkadot OpenGov and reserves the voting rights of the staked DOT. vDOT users can have their say in the governance of Polkadot as they would with DOT and obtain underlying staking yield, straight through the Bifrost interface. Instant Withdrawal: While users can redeem vDOT for DOT at any time through the Swap pool without waiting for the 28 days unlock period, the Fast Redeem feature allows users redeem their vDOT for DOT in less than 28 days via the matching queue mechanism. Yield bearing Asset: Staking rewards increase the value of vDOT relative to DOT, reflecting in the continuous growth of the redemption rate of vDOT to DOT. Users do not need to claim Staking rewards manually. Security and Decentralization: Bifrost is a decentralized, non-custodial protocol. Bifrost maintains the diversity of validator delegation through its automated and dynamic algorithm, avoiding centralization risks. Slash Protection: Bifrost protects users from slash losses through the BNC Insurance Fund. When a slash loss occurs, funds from the insurance fund are used to compensate first without affecting user earnings. Multiple Use Cases: vDOT is used in various DeFi applications, such as liquidity farming on DEXs, restaking and as a collateral asset on lending and borrowing protocols. vDOT Use-Cases Providing liquidity on the DOT-vDOT pair on native DEXs on the Astar network with Arthswap, and on Moonbeam network with Beamswap, and Stellaswap. Users provide liquidity and earn liquidity rewards. vDOT can be collateralized and lent out on the Interlay lending market, allowing users to implement a yield-farming strategy to achieve a higher compounded yield. However, this strategy requires risk management, as increasing the number of cycles may lead to higher liquidation risk. Alternatively, users can lend out vDOT to earn interest without engaging in additional borrowing. vDOT can be used as collateral for iBTC vaults, enabling vault operators to access staking rewards whilst securing the trustless iBTC bridge. vDOT can be used for participating in Polkadot governance. For users who stake DOT to mint vDOT, governance rights remain in their hands. This also reflects the Bifrost protocol’s neutrality in governance. Conclusion Since its development, the liquid staking sector has evolved from a competition based solely on yield rates to a dual of yield rates and ecosystem application scenarios. Due to Bifrost’s unique cross-chain architecture, vDOT holders have a flexible and secure solution providing optimal staking yield and benefit from interoperable and composable use cases across ecosystems. Finally, vDOT is the only LST allowing holders to participate in Polkadot governance while earning their staking yield. It is a compelling solution for users who face the dilemma of whether to stake, participate in DeFi, and govern. If you are holding DOT, are you still sure you don’t wanna try vDOT?
Education
2023 / 11 / 15 11:00
SLPx Pallet - A Further Step Into The Omnichain Liquid Staking
SLPx Pallet - A Further Step Into The Omnichain Liquid Staking
What is SLPx? SLP is the module used for processing vToken minting and redemption on the Bifrost chain. To mint and redeem vToken through SLP, users must first transfer their assets to the Bifrost chain, creating user experience issues. SLPx is a recently developed extension pallet to SLP by Bifrost that will allow users to call SLP’s functionality on a remote chain without crossing assets into the Bifrost chain. Specifically, SLPx will allow users to: Mint vTokens on a remote chain Redeem vToken on the remote chain Swap vToken/Token on a remote chain using liquidity from the Bifrost chain behind the scenes. You can use DOT directly to mint vDOT on Moonbeam, Moonriver and Astar, and both the original and target assets are on these chains. The whole process appears to be done respectively on the Moonbeam, Moonriver, or Astar local chain, and users are not bothered by the cross-chain interaction processes behind it. Likewise, you can redeem vDOT for DOT directly on the target chains. Remote minting and redemption provide convenience for user operations on remote chains. In addition to providing convenience, the token swaps enabled on remote chains offer a new meaning to “unified liquidity”. You can exchange vDOT/DOT on Moonbeam, Moonriver or Astar using the vDOT/DOT liquidity pool on the Bifrost chain. In this way, Bifrost does not need to divide the liquidity of vDOT/DOT into different chains. All chains’ vDOT/DOT exchanges share the same pool depth, leading to a more negligible price impact and a better trading experience. At the same time, if a lending protocol on any supported remote chains uses vDOT as collateral, it can directly call on the unified liquidity pool on Bifrost to complete a liquidation when it occurs. If a liquidity pool is built on a remote chain to perform liquidation, the liquidation process will likely have a higher discount rate due to insufficient depth. The Importance of SLPx For users, the minting, redemption, and swapping of vTokens have been simplified, as they can now be directly performed on Moonbeam, Moonriver and Astar without cumbersome cross-chain operations. The unified liquidity feature will also provide users with a better swapping experience. For applications on these parachains, integrating SLPx can bring additional features to their users. For example, lending protocols can remotely convert users’ collateralized DOT into vDOT, allowing users to earn staking rewards without additional steps. Furthermore, the unified liquidity will lower liquidation discounts for lending protocols. Lastly, by integrating SLPx, applications can remotely mint, redeem, and swap all types of vTokens without the need for individual adaptations for different vToken types. For the ecosystem development of Moonbeam and Astar, SLPx introduces LSD assets from different chains. The remote service capability allows users to enjoy full-chain services from other chains without leaving the native chain. For Bifrost, the remote-call feature implemented by SLPx is a significant milestone toward achieving Omni-LSD Vision. Technical Implementations SLPx is divided into two parts: the Local pallet on the Bifrost chain and the Remote pallet deployed on the remote chain (if the remote chain is an EVM chain like Moonbeam, it should be called a remote contract). For example, when a user on Moonbeam utilizes SLPx to mint DOT into vDOT, the DOT is sent to Bifrost first, minted into vDOT, and then returned to Moonbeam. During this process, the user must interact with the remote contract and remotely call the local pallet to complete related operations. The whole procedure consists of three steps: Send DOT to Bifrost Mint DOT into vDOT Send vDOT back to Moonbeam However, these three steps only require the user to initiate an interaction (pay once). After starting an interaction, all other processes are completed automatically. The same is true for the logic of remote redemption and remote swap. This process is possible because SLPx uses XCM V3 as the cross-chain instruction format. XCM V3 specifies the instruction format that XCM V2 does not have, with one of the essential types of instructions being multi-hop executions. The source chain can send an XCM V2 message to the target chain and define how the target chain executes it. No instructions in XCM V2 allow the target chain to execute the message by initiating a new XCM message. However, with the addition of this type of instruction in XCM V3, the source chain can send an XCM-001 message to the target chain, have the target chain do a series of executions, and then initiate a new XCM-002 message to any third chain (which is equivalent to an acknowledgment message if the third chain is the source chain itself). In short, XCM V3 allows an XCM message to command another chain to initiate a second XCM message. After the XCM-002 message reaches the third chain, according to the message instruction, it can continue to initiate a new XCM-003 message. This is the multi-hop transmission, and this multi-hop chain can theoretically be infinite. As long as the user on the source chain pays enough fees, the message can complete multi-hop execution until its logic terminates. In the remote minting use case of SLPx, after the user destroys the DOT on Moonbeam/Moonriver/Astar, calls the remote contract and an XCM message is sent containing the following instructions to the local pallet: Mint DOT in Bifrost (Burn-Mint logic transfer asset) Mint DOT to vDOT on the Bifrost chain Lock vDOT on the Bifrost chain Send an XCM command to the remote contract to mint vDOT (Lock-Mint logic transfer asset) on Moonbeam, Moonriver and Astar SLPx Implementation Progress We have deployed the SLPx remote pallet/contract on Moonbeam, Moonriver, Astar, and Ethereum. We will continue to deploy it on Manta, Astar zkEVM, Filecoin, and many more in the future. The remote pallet/contract has completed code auditing. The Audit Report can be found HERE. In addition, we have developed the front-end application for Omni LS dApp. Users can experience a range of functionalities such as remote minting, remote redemption, and remote swapping through the Omni LS dApp on these chains. Conclusion SLPx serves as Bifrost’s technical solution to achieve its Omni-LSD vision. Chains that deploy the SLPx remote module will be able to interact with the SLP module on Bifrost, enabling remote minting and redemption of vTokens. This ground-breaking interaction method brings convenience to users and provides a simple cross-chain integration path for developers on remote chains.
Products
2023 / 10 / 12 10:00
Chain Abstraction - The Path to a New Omnichain Web3 Architecture
Chain Abstraction - The Path to a New Omnichain Web3 Architecture
Web3 has evolved into a multi-chain ecosystem, comprising hundreds of L1 blockchains, along with various Layer2 solutions, subnets, parallel chains, and application-specific chains. While this proliferation has spurred innovation and blockchain adoption, it has also led to fragmentation, with applications, assets, liquidity, and users spread across different chains. Although cross-chain bridges offer a way to migrate assets between these chains, they fall short of creating a seamless whole. The solution lies in the concept of a full-chain architecture, which holds the promise of uniting the fractured landscape of Web3. The vision for a full-chain architecture gaining industry consensus and widespread adoption is an exciting prospect. The potential benefits are substantial, with the following outcomes on the horizon: User Convenience and Capital Efficiency: In a full-chain architecture, users would no longer need to concern themselves with where an application is deployed, where their assets reside, or where liquidity is sourced. Instead, they would interact with the entire blockchain ecosystem seamlessly, accessing all applications, assets, and liquidity effortlessly. This newfound convenience would elevate capital efficiency and enhance the overall user experience. Developer Freedom and Interoperability: Developers would be liberated from the constraints of choosing a specific blockchain or deploying instances on multiple chains to retain users. Instead, they could focus on deploying their programs and liquidity in the most suitable locations, enabling users from different chains to access them. This approach would eliminate the restrictions on interoperability between applications, facilitating free integration across different blockchains. This transformative state can be aptly described as “Chain Abstraction”. Chain Abstraction In software terminology, “abstraction” involves concealing intricate details from users to present a simplified interface, reducing complexity. Just as “account abstraction” hides elements like private keys and mnemonic phrases to ensure a seamless user experience, “chain abstraction” conceals the underlying blockchain infrastructure, enabling users to interact without the need for awareness or concern. It’s akin to using applications like WeChat or Taobao without needing to know the exact location of Tencent or Alibaba’s servers. However, achieving chain abstraction as the industry standard will require concerted efforts from the entire blockchain community. This endeavor encompasses not only applications built on a full-stack architecture but also secure, high-performance cross-chain bridge protocols and gas-less account abstraction solutions. It is, in essence, a comprehensive engineering challenge. As pioneers in the Omni-LSD (Liquidity, Security, and Developer Experience) field, Bifrost’s role is pivotal. Bifrost aims to serve as a model and reference for the full-chain integration of DeFi protocols, guiding the industry toward the realization of a unified Web3 ecosystem. Conclusion In conclusion, the journey toward a full-chain architecture within Web3 represents a crucial step forward in streamlining the blockchain experience for users and developers alike. As we continue to advance in this direction, the potential for a more accessible, interconnected, and efficient blockchain ecosystem becomes increasingly tangible. The collaboration of all stakeholders in the blockchain space is essential to make this vision a reality, and with dedication and innovation, we can reshape the future of Web3.
Education
2023 / 09 / 18 10:00
Feature
Polkadot Unlock Harvest 2.0: 2.1M DOT Liquid Staked in 30 Days
Polkadot Unlock Harvest 2.0: 2.1M DOT Liquid Staked in 30 Days
The 2nd Round of the Polkadot Unlock Harvest campaign has come to an end and we are glad to share with you the incredible results achieved. After a first round with over 1,800,000 vDOT minted on Bifrost, this time we have surpassed the previous milestone hitting an astonishing result of over 2,100,000 DOT liquid staked into vDOT on Bifrost! By the time we are writing this content, Bifrost has become the Liquid Staking protocol providing fully decentralized LST, with the highest amount of DOT staked, becoming the leader protocol of the Polkadot LST ecosystem. Outreach The event has attracted the participation of thousands users: 66,382 DOT participated in vDOT farming, ultimately converting to a minting volume of 52,187 vDOT. 1,315 addresses were invited, collectively staking 709,287 DOT and minting 557,616 vDOT. 2,954 addresses participated in minting, collectively staking 2,095,325 DOT and minting 1,647,271 vDOT. Rewards In this second round of the event, Bifrost team set up multiple reward pools and incentives to support the minting of vDOT, including: vDOT Farming Pool: vsDOT holders can stake vsDOT in advance and automatically receive vDOT after the release of the second round of crowd lending, without the need for manual operation. Participating in vsDOT Farming allows users to share the rewards from this pool. Invitation Incentive Pool: Users can invite others to mint vDOT, and the pool is divided based on the number of invites and the amount staked by each invitee. Raindrops Pool: Users minting vDOT can earn Raindrops points, and they can also earn bonus points by completing specific tasks. The pool is divided based on the points earned by each participant. As announced via Bifrost official social media pages, the addresses who joined the event and contributed to reach such an incredible goal will be rewarded with an airdrop of 124,000 BNC Tokens! These rewards will be distributed proportionally to stakers who collected Raindrop points minting vDOT, inviting friends and being part of the farming pools. The distribution will proceed linearly - on a weekly basis - following a vesting period. Results Overall, during the last two rounds of Polkadot Unlock Harvest, almost 4,000,000 DOT were staked into Bifrost, leading to an increase of vDOT minting volume and a growth percentage of 185% in less than 6 months. During the event, we have received massive support and recognition from the community of vDOT holders and users. This support and recognition stem from some extra features of vDOT, announced over the last few months: Governance Voting Retention Power: vDOT holders can participate in governance voting in OpenGov, just like they do with DOT. Airdrop Eligibility: Airdrops within the Polkadot ecosystem for DOT holders will be fully distributed to vDOT holders. Currently, vDOT holders have received eligible $PINK and $DED as airdrops. Ecosystem Interoperability and Composability: vDOT holders can not only trade it at any time but are also able to create higher compounded yields and more utility in the Polkadot DeFi ecosystem. What’s Next? The 3rd round of the Polkadot Unlock Harvest will be probably announced in April, consequent to the unlocking of the DOT contributed to the third Polkadot round of Parachains Auction, among which the contribution made by users to Bifrost itself stands out. Thanks for being part of the Liquid Staking Revolution!
Events
2024 / 02 / 27 11:00
Polkadot Crowdloan Unlock 1.0 - Data Recap
Polkadot Crowdloan Unlock 1.0 - Data Recap
With the conclusion of the first round of the Polkadot slot lease for parachains, an amount of 100,000,000 DOT was unlocked. On October 12th, Bifrost launched the Polkadot Unlock Harvest Event, which started a week earlier than the actual date of the unlock and finished on November 22nd, spanning 40 days. The event’s goal was to encourage participants to liquid-stake their DOT, which have been unlocked in the process, by minting vDOT on Bifrost. Participants could earn Raindrops points by minting vDOT and inviting others to join the event. A reward of 500,000 BNC have been put in place for this event and it is going to be shared, based on the Raindrops acquired by users. As of the event’s conclusion: 1701 addresses had minted vDOT over 2,310,000 DOT have been Minted into 1,888,416 vDOT Total Minting Volume (TVS) of 12 million USD On average, each participating address minted approximately 1,110 vDOT and received a share of 450 BNC rewards. The rewards for participants in this event will be released linearly, once a week, over the coming months. The Polkadot Unlock Harvest event significantly increased the daily minting volume of vDOT, with a growth of around 113%. More users are benefiting from compounded returns through liquidity staking with vDOT. As a liquidity staking asset, vDOT offers the flexibility of being instantly redeemed for DOT through a quick redemption feature (lightning mode) or traded at any time through liquidity pools. vDOT also provides multiple advantages for holders, including participation in yield farming, lending, and much more! It’s worth noting that performing a DOT to vDOT conversion, users do not give up their governance rights. Stakers can directly use vDOT when voting in OpenGov through the governance interface provided by Bifrost. Among DOT Liquid Staking Tokens, this feature is unique to vDOT! With the continuous growth of vDOT minted, Bifrost will continue to work on vDOT integration across different chains and explore additional use cases and applications. We will continue to build until the realization of Bifrost’s omni-chain vision. Join us today. Visit bifrost.app
Events
2023 / 12 / 05 11:00
Bifrost Presents Omni LS DApp - The Easy And Secure Way To Access Liquid Staking From Any Chain
Bifrost Presents Omni LS DApp - The Easy And Secure Way To Access Liquid Staking From Any Chain
What is Omni LS? Omni LS DApp is a front-end application developed by Bifrost that supports remote minting and redemption of Bifrost liquid staking tokens (LST) “vTokens”, as well as Remote Exchange and Swap of vTokens. This front-end application is powered by the SLPx Module deployed on the chain, which consists of the local pallet/smart contract of the Bifrost chain and the remote pallet/smart contract on the remote chain. Currently, Omni LS DApp supports remote minting, redemption, and exchange on the EVM Parachains such as Astar, Moonbeam, Moonriver and Polkadot relay chain, as well as on Ethereum. What problem does the Omni LS DApp solve? Bifrost’s vToken is an LST asset created by the Staking Liquidity Protocol (SLP). Currently, Bifrost supports vDOT, vKSM, vGLMR, vMOVR, vBNC, vFIL, and vETH. Except for vETH and vFIL, the other vTokens require users to transfer their corresponding assets to the Bifrost chain before these can be minted into their respective LSTs. This process poses challenges for user experience and broader adoption! Suppose there is a lending and borrowing protocol on Moonbeam that supports vDOT as collateral. This feature is beneficial for users as they can earn additional staking rewards compared to collateralizing DOT. However, with the current process, if a user only has DOT on Moonbeam, they would need to follow these following steps: Transfer DOT from Moonbeam to Bifrost through cross-chain transfer Stake DOT on the Bifrost chain to obtain vDOT Transfer vDOT back to Moonbeam through cross-chain transfer Collateralize vDOT on Moonbeam and borrow the desired asset An Easy Solution The Omni LS DApp aims to simplify this process and provide a seamless experience for users to natively mint and utilize vTokens across different chains. Instead of the user needing to operate in four steps and sign transactions four times, with the Omni LS DApp, steps can be shortened to just two: In the Omni LS DApp, directly convert DOT on Moonbeam into vDOT. Lend vDOT on the native Moonbeam lending protocol and borrow the desired assets. In addition to remote minting, the Omni LS DApp also supports remote redemption and exchange: Remote redemption: Users can directly redeem vTokens for their original tokens on other chains without the need to transfer them to the Bifrost chain. Remote exchange: Users can exchange vTokens for their original tokens, or vice versa, on other chains without the need to transfer assets to the Bifrost chain. However, the liquidity used behind the scenes is from the Bifrost chain. In summary, the Omni LS Dapp allows users to directly mint, redeem, and exchange vTokens on remote chains in just a click, without the need to switch between multiple Dapps and chains to complete these operations. Is the Omni LS DApp Secure? The backend of Omni LS DApp utilizes the SLPx Module developed by Bifrost, which has undergone an audit by Common Prefix. The Audit Report can be found HERE. Currently, Omni LS DApp only supports remote operations on Polkadot parachains. The security of cross-chain message transmission behind these remote operations is ensured by the Polkadot relay chain. As a multi-chain system that shares security, communication between Polkadot parachains has a high level of security. In the future, if Omni LS DApp needs to support remote operations on heterogeneous chains, it will require support from a cross-chain bridge infrastructure. The security of heterogeneous cross-chain bridges is still an unresolved issue, and we will exercise great caution in this regard. Omni LS DApp Operation Guide Click to visit the Omni LS DApp homepage: omni.ls To connect your wallet, click on the “Connect Wallet” button located in the top right corner. Remote Minting Click on the “Stake” tab Select the asset you want to remotely mint into its respective LST “vToken” Go to the minting page Enter the desired quantity Click on “mint” The vToken will be minted on the original chain where the asset is located. Remote Redemption Click on the “Unstake” tab Select the asset you want to redeem Go to the redemption page Enter the quantity of the asset Click on “redeem” The original token will be redeemed to the chain where the vToken is located. Remote Exchange To perform a swap, navigate to the Swap tab, select the type of asset you want to exchange, enter the desired amount, and click on the “Swap” button. Future Developments of Omni LS DApp The architecture of Polkadot naturally enables the possibility of Omni-chain applications. However, this potential has not yet been fully explored, and many applications still choose to deploy on a single parachain. Even with multi-chain deployment, it essentially replicates a single-chain Dapp on different chains. From the user’s perspective, an Omni-chain Dapp is an application that can be accessed on any chain. Users shouldn’t have to worry about which chain they are on and should be able to use it like a local native Dapp on any chain. Whilst multi-chain deployment can achieve to some extent similar effects, contracts deployed on different chains cannot communicate with each other. This leads to issues such as inconsistent asset formats and fragmented liquidity. We believe that the Omni LS DApp’s remote access feature is the solution for Omni-chain Dapps. We hope that applications integrated with vTokens can incorporate the functionality of Omni LS DApp through a series of strategic integrations. When a user on Moonbeam uses a lending Dapp to collateralize DOT, the system automatically converts DOT to vDOT, combining four steps into one. We are also about to launch corresponding incentive programs to encourage developers and DeFi applications to explore more complex and useful integrations. Conclusion We have introduced the best front-end interface ever developed by Bifrost - the new Omni LS DApp! This enables users to remotely mint, redeem, and exchange vTokens. Compared to the original process, Omni LS DApp simplifies the user experience by allowing users to utilize the services provided by the Bifrost chain on remote chains, such as local DApps. In terms of security, currently, the Omni LS DApp only supports remote access to Polkadot parachains. However, in the future, we plan to gradually support heterogeneous chains. Omni LS DApp serves as an example application developed by Bifrost. We hope to see more third-party applications adopting a similar approach to deeply integrate Bifrost vTokens and make LSTs a key primitive within DeFi.
Announcements
2023 / 10 / 19 10:00
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