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TL;DR Tokenomics must evolve alongside a project’s growth. In Bifrost’s case, the journey can be seen in three phases. Phase I: Organizing productive resources to launch the project. At this stage, the primary focus is on token supply and allocation, ensuring that capital, talent, and community incentives are properly coordinated to bootstrap the network. Phase II: Aligning fair and sustainable incentives to drive expansion. The emphasis shifted toward fair, systematic, and sustainable incentive mechanisms that could drive ongoing business growth, user adoption, and ecosystem participation. Phase III: Achieving maturity and distributing profits back to the community. Once the project reached a stable, revenue-generating phase, the main job is to reward contributors and align the community through a growth flywheel. Why Tokenomics Defines Web3 Tokenomics emerged alongside Web3 as a new form of economic coordination — a model that redefines how productive resources are organized, how value is distributed, and how communities sustain collective growth. In fact, the introduction of Tokenomics is what fundamentally separates Web3 from Web2. Through tokenomics, crypto projects can achieve multiple goals more efficiently — raising funds, acquiring seed users, aligning incentives, building loyal communities, and distributing project income fairly. A well-designed tokenomics doesn’t just support growth — it shapes it. Phase 1: Organizing Productive Resources Token distribution, at its core, is the process of organizing productive resources — capital, talent, users, and liquidity. A project needs funding, so it allocates tokens to institutional or public investors through private or public sales. It needs people, so it reserves allocations for the core team and advisors. It needs users, especially early adopters, so it conducts fair and effective airdrops (often balancing between real users and farming bots). It needs liquidity and TVL, so it launches farming campaigns to incentivize deposits. And if it’s building an ecosystem, it issues grants to attract other projects to join. When designing a tokenomics, the first step is to understand what productive resources your business must organize — their relative importance, and how that importance will evolve over time. Once this is clear, questions such as how tokens are generated, distributed, and vested are merely matters of execution. BNC’s total supply is fixed at 80,000,000, with no inflation, distributed as follows: 10% held by the foundation 20% allocated to the early team (unlocking over 2 years after a 6-month TGE cliff) 15% allocated to early investors across 4 rounds (a small portion unlocked at TGE, the rest linearly over 8 months) 5% gradually distributed to Bifrost parachain collators 5% reserved as a risk control fund for vTokens to cover slash events 45% reserved as ecosystem funds, governed via proposals for parachain crowdloan incentives, vToken minting rewards, liquidity incentives, and other market initiatives. Through this allocation, Bifrost successfully recruited its founding team, raised development funding, secured marketing resources, won Polkadot parachain slots, and grew its seed community — ultimately achieving product-market fit. BNC’s Token Generation Event took place on October 21, 2021. Most allocations for the team and investors are now fully unlocked. Roughly half of the collator and ecosystem incentive funds remain unspent. With Bifrost now generating profit, 20% of tokens remain unallocated, giving us enough flexibility to address future distribution needs. Phase 2 — Sustaining Growth Through Aligned Incentives Bifrost’s growth stems from three forces: persistent product improvement, long-term brand credibility, and the ability to capture market opportunities through rapid execution. During key moments — Polkadot/Kusama slot auctions, vToken expansions, the Ethereum Shanghai upgrade, or major DOT/KSM unlocks — Bifrost maintains flexible incentive spending to move quickly and capitalize on momentum. Rather than locking in long-term mint-drop or farming policies, we deploy ecosystem funds through governance proposals for targeted campaigns. In practice, Bifrost’s largest growth spurts came from short, concentrated opportunity windows. For example, during the Polkadot Unlock Harvest event in October 2023, with 50,000 BNC in rewards, Bifrost attracted 2,310,000 DOT minted as vDOT in just 42 days — boosting TVL by over $12 million. Each campaign is designed with a clear target and a fixed total reward pool. Once the total reward pool is set, the reward intensity becomes fixed and controllable. This ensures incentives remain attractive yet controllable. Even if participation exceeds expectations, the budget impact remains manageable. That’s why Bifrost avoids “quest-style” farming or empty engagement campaigns. We want authentic users to participate — staking or providing liquidity. Even if some funds leave after an event, each interaction builds a connection, and many users eventually return. Ultimately, growth doesn’t come from temporary campaigns, but from sustainable yield-stacking scenarios that give vTokens long-term utility and attractiveness. Issuing token rewards is essentially a marketing expense. Even for projects without a TGE, it’s crucial to avoid overusing incentives. We’ve seen projects fail because they didn’t plan reward intensity properly — causing drastic discrepancies between campaigns. Bifrost’s campaigns always require genuine participation rather than simple “click-to-earn” tasks. Meanwhile, we continue to enhance productive capacity by expanding use cases and cross-chain composability — the fundamental drivers of vToken competitiveness. Phase 3: Flywheel and Profit Distribution No matter how sophisticated a tokenomics looks, without revenues and profits, the token is no different from a meme coin. For Bifrost, the key word is certainty. “Certainty” means a strong correlation between revenue and token value. There are two ways to achieve it: Binding token utility to essential services (e.g., gas fees on L1s), Using project profits to buy back tokens from the market — a model widely adopted by leading DeFi protocols. As the Web3 bubble cools and projects mature, the community’s focus is shifting from speculation to predictable value. Many DeFi projects are shifting to profit-sharing, as communities increasingly reject “governance-only” tokens disconnected from real revenue. Bifrost’s approach to certainty is rigid buybacks and revenue sharing. Traditionally, buybacks are executed via governance proposals — with repurchased tokens burned or stored in the treasury. While this can support prices, it leaves token holders uncertain about timing, scale, or follow-through, since teams still influence proposal results. In contrast, Bifrost Tokenomics 2.0 implements fixed, monthly buybacks: 100% of protocol profits are used to repurchase BNC from the market. 10% of buybacked tokens are burned (deflationary), and 90% are redistributed to bbBNC holders. The 10% burn creates long-term scarcity and upward price expectations. The 90% redistribution acts as a dividend mechanism for bbBNC holders. So what is bbBNC, and why we redistribute profits this way? bbBNC is a non-transferable token and revenue-sharing representation voucher, obtained by locking BNC or vBNC. The more and the longer you lock, the more bbBNC you receive. The maximum lock duration is 4 years. As time passes and the unlock date approaches, bbBNC linearly decays. If you’re familiar with Curve’s veCRV, this should sound familiar. This model ensures that greater rewards flow to long-term believers rather than short-term speculators. Those believers — who share Bifrost’s mission and contribute consistently — form the backbone of our community. Final Thoughts In designing Bifrost’s tokenomics, one principle has guided us throughout: Build to Earn. Token rewards are distributed according to each participant’s contribution to the network’s development and resilience. Under this principle, we choose to walk with long-term builders. It is the builders — those who stay, build, and believe — who sustain a protocol’s productive capacity. Speculators will always be part of the market — and that’s healthy. But for a project to truly thrive, it must cultivate a strong, committed base of stakeholders — its community. These are the thoughts I’d like to share with fellows.

Dev Progress Runtime 22001 (Upgraded) Supports Polkadot AssetHub Migration (AHM) Runtime 22002 (Upgraded) Optimized BNC P<>K cross-asset fee logic Runtime 23000 (Under Development) vETH SLP now supports Snowbridge ETH SLPv2 protocol adds support for universal XCM types SLPv2 adapts to the Commission Channel module SLPx compatibility extended to AssetHub Permanent locking option added for bbBNC XCM cross-chain transaction components refactored and optimized Global vToken exchange-rate security enhancements Omni LS 1.10.0 (In Testing) Supports vETH 3.0 Dapp 1.10.0 (In Testing) Supports vETH 3.0 Product Updates Bifrost’s Total Value Locked (TVL) reached $63,551,911 this month. Among all products, vBNC delivered a standout performance, with a total minting volume (TVS) of 14,842,924 vBNC and over $1.36M in TVL — marking a 63% month-over-month growth. Since the launch of Bifrost’s buyback mechanism, bbBNC — the core revenue-sharing token — has accumulated over 10,000,000 BNC locked. To date, Bifrost has bought back 1,102,067 BNC and burned 123,109.13 BNC, with an average lock time of 442 days. View bbBNC dashboard vMANTA 2.0 Upgrade — aligned with Manta Network moving its native staking to Ethereum, vMANTA 2.0 migration is now complete. Users can mint the upgraded vMANTA directly on Ethereum mainnet using omni.ls. Full guide: How to liquid stake MANTA DeFi Singularity Round 2 incentives are now live, with the same reward pool as Round 1. How to participate this event:DeFi Singularity Tutorial Marketing & Community Nov 1 — Launch of Tokenomics 2.0: bbBNC (Buy Back BNC) Bifrost officially launched Tokenomics 2.0, introducing bbBNC — the revenue-sharing lock certificate for BNC. Under this model, 100% of protocol profits are used to buy back BNC, with 10% burned and 90% distributed to bbBNC holders. Nov 4 — bbBNC Twitter Space Bifrost hosted a dedicated Twitter Space to walk through bbBNC’s utilities, reward mechanics, and the structure of the new economic model. Nov 4 — Scored 38/40 on Blockworks Token Transparency Framework Bifrost achieved an impressive 38 out of 40, demonstrating industry-leading transparency across revenue disclosure, governance, treasury structure, and tokenholder alignment. Nov 14 — People Chain Incentive Deep Dive Bifrost Co-Founder Lurpis joined PolkaWorld’s livestream to unpack the design and value behind the “People Chain” activation campaign. Nov 15–20 — Bifrost at Sub0, Buenos Aires Bifrost Dev Rel Victor attended Polkadot’s Sub0 conference in Buenos Aires and delivered a talk titled “Yield Fusion: Bifrost’s Strategy for Yield Aggregation.” See the highlights here

The era of narrative-driven hype is behind us. Crypto is entering a new phase — one centered around revenue-generating fundamentals. In this cycle, what matters isn’t token presales or speculative airdrops — it’s real, recurring protocol revenue. Sustainable profit is becoming the lifeblood of serious crypto protocols, replacing short-term fundraising and Ponzi-fueled growth models. On the investment side, both primary and secondary markets are shifting. VCs are now targeting verticals with clear monetization paths: DeFi, CeFi, RWA and stablecoins. Meanwhile, on the open market, projects like Hyperliquid, pump.fun, and AAVE — all of which generate revenue and commit to buyback strategies — are commanding valuation premiums. The message is clear: protocols that produce yield and return value to holders are winning. We’re witnessing a transition away from casino-like speculation toward ecosystems that function more like revenue-generating businesses. Beyond Buybacks: The New Value Distribution Paradigm Profitability, however, isn’t the end game. The real question is how protocols return value to token holders. Unlike equities, crypto tokens have no built-in dividend rights; whether holders share in profits depends entirely on tokenomics design. In many protocols, the token is disconnected from revenue, leaving holders unable to capture value. But generating revenue is just step one. The critical question for any tokenized protocol is: how do you return that value to token holders in a way that’s fair, transparent, and aligned? Unlike traditional equities, crypto tokens have no built-in dividend rights; whether holders share in profits depends entirely on tokenomics design. In many protocols, the token is disconnected from revenue sharing with holders. There are two approaches to fix this: linking token utility directly to protocol usage (e.g., gas fees on L1s); redistributing revenue to token holders through buybacks or dividends — the model most DeFi protocols use today. Historically, most DeFi buybacks are governance-triggered. Teams submit proposals, buy tokens on the open market, then either burn them or transfer them to the treasury. The idea is to reduce supply and create value for remaining holders. But this system is flawed — rewards are inconsistent, unpredictable, and often gamed. It breeds short-termism and weakens long-term community alignment. Tokenholders end up speculating on governance outcomes instead of trusting in systematic value distribution. Hardcoded Buybacks: The Bifrost Tokenomics 2.0 Bifrost is flipping the script with its Tokenomics 2.0 upgrade, introducing scheduled, non-discretionary buybacks. Each month, the protocol allocates its treasury revenue to automatically buy back BNC on the open market. Purchased tokens are then split: 10% are burned, and 90% are distributed to bbBNC holders. The burn mechanism creates long-term deflationary pressure. The bbBNC distribution turns protocol revenue into direct dividends for long-term supporters. This isn’t just a passive incentive — it’s a structural flywheel designed to reward conviction and commitment. bbBNC: A Non-Transferable Yield Token bbBNC is a yield-bearing voucher that users receive by locking vBNC. The number of bbBNC tokens received depends on both the amount locked and the duration — the longer and larger the lock, the more bbBNC you receive. Lockups can be as long as four years, and bbBNC decays linearly as the unlock date approaches, much like veCRV. This design filters for long-term alignment. Only those willing to commit capital over time receive a meaningful share of protocol profits. In return, bbBNC holders are granted exclusive access to revenue distributions — a model that draws clear inspiration from Curve’s ve-token mechanics. It’s a smart evolution of token economics: shifting from speculation to stake-based governance and yield. It ensures value is captured by those who actively support and secure the protocol, not just passive tokenholders or short-term traders. Transparent Execution, Regular Dividends Bifrost’s buyback engine went live on November 1. Since then, the protocol has repurchased 955,108 BNC from the open market — roughly 1.25% of circulating supply — and earmarked these tokens for distribution. All buyback records are transparently recorded on-chain and tied to specific governance proposals, reinforcing trust through verifiable execution. bbBNC minting and reward claims also went live on the same day. Users can lock their BNC or vBNC, receive bbBNC, and immediately start claiming their share of the revenue pool at bbBNC landing page. If you were early to mint, you’re already earning a cut of the pending distribution. Valuation Breakdown In crypto, and especially DeFi, “revenue” typically refers to gross protocol income — fees generated before incentives. Market capitalization, meanwhile, measures the value of circulating tokens. A common framework used across TradFi and DeFi alike is the MarketCap-to-Revenue (M/R) multiple, which helps assess how efficiently a token is priced relative to its income-generating power. Instead of using traditional “circulating supply cap,” we anchor the valuation using “unlocked supply cap”. Since tokens staked for governance or validator operations — while not freely tradable — are actively contributing to the network and should be counted in the economic base. Unlocked supply, not just liquid supply, reflects the actual utility footprint of the token. Now we can get a read on how $BNC is priced versus its fundamentals. Total Supply: 80 million $BNC Unlocked Supply: 77.36 million (96.72% unlocked) Price per BNC: ~$0.10 FDV: ~$7M Annualized Protocol Revenue (past 12 months): $1.37M This puts its M/R ratio at 5.6x. For comparison, most top DeFi protocols trade at 8x or above. Lido, for example, is at 9.8x according to DefiLlama. By this metric, BNC is significantly undervalued — despite offering recurring revenue, enforced buybacks, and real yield. The Flywheel Is Spinning Crypto is maturing — and with it, the rules of the game are changing. We’re moving past the era of pure speculation, where narratives fueled short-term pumps. The new frontier is cash flow: protocols that generate real revenue, share it transparently, and align with long-term participants. Bifrost’s model creates a tightly-coupled growth loop: PoS staking generates rewards → rewards fund monthly buybacks → buybacks drive yield to bbBNC holders → yield attracts long-term supporters → supporters help grow the ecosystem → ecosystem growth drives more revenue. With ~$100M in TVL and its flagship product vDOT seeing 242% minting growth and 82.2% holder growth in 2025 alone, Bifrost is gaining serious traction. The protocol is preparing to launch vETH 3.0 (an omni-chain liquid staking solution for EVM chains), a native stablecoin vault, and a next-gen vToken suite — expanding its yield layer across multiple ecosystems. “Narratives and Speculation” is the past, “Revenue and Application” will be the future.