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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
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
Join Bifrost-Polkadot Collator Rivals and Share 8000 BNC
The main goal of the Bifrost 2.0 upgrade is to migrate Bifrost’s primary operations from the Bifrost-Kusama chain to the Bifrost-Polkadot chain. To enable decentralized operations and block collection on the Bifrost-Polkadot chain, we will launch the Collator module there and guide the Collators on the Bifrost-Kusama chain to migrate accordingly.
After the migration, we will launch the official cross-chain bridge, enabling users to transfer BNC and vBNC between the Bifrost-Kusama and Bifrost-Polkadot chains. We also plan to conduct a public testing event to ensure a seamless transition.
Bifrost-Polkadot Collator Rivals event
We will first launch the Collator module on the Bifrost-Polkadot testnet, allowing Collators to receive test tokens and run the Collator program. The public test event will be conducted in two phases, and participating Collators can share in 8,000 BNC rewards.
Phase 1: Jul 30 - Aug 6, with 16 Collator slots, sharing a total of 2,800 BNC rewards (175 BNC per participant on average).
Phase 2: Aug 6 - Aug 13, with 32 Collator slots, sharing a total of 5,200 BNC rewards (162.5 BNC per participant on average).
How to Participate?
To become a Testnet Collator, you need to deposit at least 5,000 $BNC (test tokens), which you can obtain from our faucet.
Receive Testnet BNC:
Join the Bifrost faucet Telegram group!
Enter the command !drip in the Bifrost faucet Telegram group to receive test $BNC tokens.
💡 Note: Each Telegram account can receive 5010 BNC (testnet) every 12 hours.
Hardware Requirements
Operating System: >Ubuntu 22.04
CPU: 4 cores (3.2GHz or above)
Memory: 8GB
Storage: 200GB SSD
Bandwidth: 10 Mbps or higher
Tip: A CPU frequency below 3.2GHz may affect the normal block production of the Collator. It is recommended to use an SSD that supports the NVMe protocol.
Once your Collator is successfully registered, you will enter the waiting queue. Your promotion to an active Collator will then be determined based on your BNC (testnet) delegation ranking.
For more details, please read the documents:
Collator Requirements
How to Run a Collator
How to Activate a Collator
To improve your delegation ranking and become an active Collator, you may self-delegate or gain support from others. Your supporters will need to obtain BNC (testnet) from the faucet.
Supporters can use the Bifrost App to complete the delegation process. Ensure you switch to the Polkadot testnet before delegating.
Note: You need to maintain block production in order to be considered an active Collator, if the APR column is empty, it means that you are not qualified for active Collators.
Join Our Discord
We encourage everyone to join our Bifrost Discord Collator channel to discuss related topics, share feedback, and address any issues that may arise during the testing process.
FAQ
Q: Will delegators receive BNC rewards during this event?
No, only Collators will receive rewards.
Q: Where can I receive BNC (testnet)?
Join the Bifrost faucet Telegram group and enter!drip .
Q: How can I check my Collator ranking?
Check your ranking in the Bifrost App.
Alternatively, use Polkadot.js, go to chainstate, and query CandidateInfo under ParachainStaking.
Q: As a Collator, how can I improve my delegation ranking?
Besides self-delegation, you can seek support from the community.
Jump in to score a reward and drive the growth and evolution of the Bifrost ecosystem!
Events
2024 / 07 / 26 10:00
Unlocking the Potential - Chapter 5: Bifrost Tokenomics and vTokens Application Scenarios
Tokenomics
The native token of the Bifrost protocol is the Bifrost Native Coin (BNC). BNC is used as the gas fee and governance token for the Bifrost Polkadot and Kusama chains.
Holders of BNC can engage in protocol governance by submitting proposals and voting. This includes:
Modifying protocol parameters
Approving treasury expenditures
Deciding on new feature implementations
We will empower vBNC with governance rights in the future, in line with other vToken Voting mechanisms.
The total supply of BNC is capped at 80,000,000, with no mechanism for additional issuance.
Bifrost is set to launch BNC 2.0, a new tokenomic model designed to create a sustainable and attractive economic framework for the protocol. This model introduces a protocol revenue-sharing mechanism, enhancing BNC’s utility and value and transforming it into a yield-bearing asset. Long-term holders will benefit from fair income distribution through these mechanisms.
Bifrost’s new Tokenomics will be released soon, stay tuned!
vToken Application Scenarios
What can vTokens be used for?
vTokens have diverse applications across the Polkadot ecosystem. They offer substantial base yields, are tradable within a unified liquidity pool, and can be quickly redeemed through peer-to-peer matching. Additionally, vDOT and vKSM inherit the governance rights of the underlying assets and and offer other advantageous features.
As the Liquid Staking Token (LST) sector evolves, competition among LST protocols has shifted from basic feature comparisons to ecosystem-level contests. The focus is now on additional yield opportunities and whether LST protocols can provide diversified yield strategies to cater to various risk appetites.
To address this, Bifrost has developed dedicated application pages for each type of vToken on its dApp, highlighting their specific use cases and benefits.
Below is the scenario page for vDOT:
On this page, Bifrost aggregates various application scenarios for vDOT and offers a comprehensive library of yield strategies under the “Earn” category to meet the needs of yield maximizers.
One noteworthy yield strategy for LSTs is leveraged staking. This involves combining LST and lending protocols to amplify staking returns, albeit with higher liquidation risks. Bifrost has developed Loop Stake to support leveraged staking, which allows users to set up to 4x leverage.
Leveraged staking requires liquidity from lending pools, and Loop Stake will remain open to aggregate cross-chain liquidity, offering users the best lending rates. By leveraging Polkadot’s XCM messaging and Bifrost’s cross-chain architecture, Loop Stake can remotely access liquidity from lending pools on other parachains, such as the DOT/vDOT lending pools on Interlay Lend and Hydration Omnipool.
However, considering that the growth in leveraged staking demand is a gradual process, Loop Stake initially created a local lending pool on Bifrost to provide lending liquidity, with plans to gradually expand in the future.
In the DeFi sector, “Farming as a Service” is gaining traction. DeFi protocols now offer a single source of yield and a series of combined yield strategies. This simplifies the process, enhances capital efficiency, and provides greater flexibility.
Loop Stake is just the beginning. Bifrost plans to introduce more combined yield strategy products, expanding options for vToken holders.
For more information about Loop Stake, please read:
Bifrost launches LoopStake - Supercharge Staking Rewards through Leverage Staking
Research
2024 / 07 / 19 10:00Fundamental
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
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
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 10:00Feature
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
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
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 10:00Get the latest blog posts
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