Announcements | Bifrost

Bifrost Farming Incident Technical Report

Announcements

2026 / 08 / 17 12:30

Following the August 8 farming incident, we have completed a deeper technical investigation into how the exploit occurred, why it was possible, and what needs to change. Our previous updates focused primarily on the immediate response and asset recovery. With the root cause now confirmed, we want to provide a clearer account of what happened and what comes next. What Happened The vulnerability can be traced back to a farming architecture refactor deployed in December 2024. At the protocol level, base farming pools and gauge pools serve fundamentally different purposes. A base pool share represents a user’s deposited assets and therefore corresponds to a redeemable claim against assets held in a keeper account. A gauge share has a different meaning. It is a bbBNC-weighted accounting factor used to determine farming reward allocation. No token is deposited into a gauge pool when this value is created. Before December 2024, these two pool types were represented separately. The refactor merged gauge pools into the same pool and share-accounting structures used by base pools. During that process, the gauge pool also inherited the base pool’s keeper account. This created an unintended path in which a gauge accounting value could pass through the same internal share-removal logic as an actual deposit receipt. Once recorded as a withdrawal request, settlement could draw real depositor assets from the base pool keeper. The vulnerability was also reachable through multiple internal paths. The shared share-removal function could be reached from five call sites, including an interface used by the bbBNC pallet. This meant that the issue existed below the level of a single public farming function and had to be fixed inside the shared internal logic itself. Why the vulnerability remained dormant Although the defect was introduced in December 2024, it initially could not be exploited. The amounts generated by the gauge-share calculation were far larger than the assets available in keeper accounts. Any attempted withdrawal would therefore fail because of insufficient keeper balance. In April 2026, a numeric normalization fix changed the magnitude of these values. The change was intended to correct numerical behavior, but it unintentionally compressed the affected values into a range that the keeper could successfully settle. This transformed an existing dormant defect into an exploitable vulnerability. We verified this causal relationship through reproduction testing. When the normalization behavior was reverted, the exploit consistently failed because the requested amount exceeded keeper balances. At the production value introduced after normalization, the exploit succeeded. The April change therefore acted as the trigger that made the defect exploitable. How the attack was executed The attacker appears to have prepared the transaction through extensive offline simulation. The observed gauge amplification factor was approximately 1003.108682×, determined by a bbBNC position created by the attacker inside the same transaction. The attack then proceeded through several stages within one atomic transaction: The attacker funded controlled accounts with BNC and a small amount of vDOT. A small contract containing pre-encoded calls was deployed. The attacker created and fully locked the bbBNC position required for the approximately 1003× gauge factor, together with the LP positions required to access the other affected pools. The transaction executed 49 extraction rounds across three farming pools. The extracted assets were consolidated into attacker-controlled accounts. Each extraction round combined legitimate farming operations with an additional withdrawal request that had no corresponding underlying deposit. The amounts were also carefully pre-calculated. The final extraction round for each pool was deliberately reduced so that the keeper could be almost emptied without triggering an insufficient-balance error, which would have reverted the entire transaction. The deployed contract itself performed no arithmetic and did not depend on live chain-state decisions. It primarily replayed values that had already been calculated before the transaction was submitted. This strongly indicates that the exploit had been rehearsed against simulated chain state beforehand. All required conditions were created inside the same transaction. The attacker did not need to hold the required bbBNC or LP positions in advance. From preparation to extraction, the entire attack completed in one transaction and one block. The gauge withdrawal waiting period also defaulted to zero, allowing settlement to occur immediately within that same block. Once execution began, there was effectively no opportunity for manual intervention. The investigation further confirmed that EVM was not the source of the vulnerability. Although an EVM contract was used during execution, the same exploit logic could have been performed using the chain’s atomic batch functionality alone. Why It Was Not Detected Earlier The investigation identified several weaknesses that allowed the defect to survive code review, testing, and production deployment. The most important was the absence of a protocol-level fund invariant. The farming system did not automatically enforce a condition equivalent to: Keeper balance ≥ total redeemable depositor claims Existing tests validated individual farming operations, but they did not continuously verify that the assets held in a keeper remained consistent with all outstanding user claims. This allowed two values with very different economic meanings, an asset-backed deposit receipt and a gauge accounting weight, to move through the same logic without triggering an invariant violation. There were additional contributing factors. Gauge and base pools shared the same ID type and ID space, with insufficient boundary validation between them. The December 2024 refactor also carried over a keeper field that had previously been harmless because gauge pools had no withdrawal path. Once the pool types were merged, that same field became part of an active payment path. The April normalization change affected a value consumed across multiple modules, but the review focused primarily on the numeric correction itself. Its downstream interaction with withdrawal settlement was not fully traced. Monitoring was another major gap. During the attack, a 99.97% single-block decrease in keeper balance did not trigger an internal alert. The incident was first identified through an external report. At the same time, our reconstruction confirms that monitoring alone would not have stopped this attack. The attacker created every required position and completed the extraction inside a single block. This means the primary defense must exist at the protocol level, preventing invalid fund movements from being finalized in the first place, with monitoring acting as an additional layer of protection. vDOT Remains Fully Backed The farming exploit did not affect the DOT reserves backing vDOT. This distinction is important because the vDOT involved in the farming incident and the underlying reserves backing vDOT are held and managed through separate protocol paths. The forensic reconstruction confirmed that no unauthorized vDOT minting occurred. Every asset extracted during the incident can be reconciled directly against decreases in farming keeper balances. The exploit path remained confined to farming keeper sub-accounts and never accessed the vDOT minting mechanism or the underlying staking reserves. The attacker subsequently sold extracted vDOT on the secondary market, creating temporary price impact in the DOT/vDOT pool. That market imbalance was largely corrected through arbitrage and did not change the protocol-level backing of vDOT. vDOT therefore remains fully backed by its underlying staked DOT. What We Are Doing Now The vulnerability has been localized, and the root cause has been confirmed through full attack reproduction. We have implemented three independent layers of defense, together with a state migration designed to remove vulnerable state and regression tests based directly on the original attack. Each defense layer has been independently tested by reverting that specific protection and attempting the exploit again. This allows us to verify that each layer directly blocks the identified attack path. Because the vulnerable behavior could be reached through several call paths, the core fix has been applied inside the shared internal share-removal logic rather than relying only on protections at individual extrinsic entrypoints. We are also implementing broader security improvements across the farming architecture, including: Protocol-level fund invariants that validate keeper balances against redeemable user claims Stronger type and boundary separation between gauge pools and asset-backed base pools Real-time monitoring and alerts for abnormal keeper balance changes Additional review requirements for type-merge refactors and changes whose values are consumed across multiple modules Expanded attack-reproduction and live-state migration testing Farming services will remain paused while remediation deployment, migration rehearsal, and the broader security review are completed. Asset recovery also remains ongoing. The subsequent movement of funds from HitBTC to Binance has provided an important lead for the investigation. We are working with Salus , SlowMist , law enforcement, and the relevant exchange teams to continue tracing the assets and pursue available recovery channels. For affected users, farming positions and shares will remain recorded on-chain. These records preserve each user’s position and will serve as the basis for any subsequent recovery or remediation process. No action is required from affected users at this time. We will share further updates as soon as there is confirmed progress.

Bifrost 2025 Annual Report

Announcements

2025 / 12 / 31 09:30

In 2025, the crypto industry did not arrive at an easy answer. While ETFs continued to channel institutional capital into the market, the year was equally defined by heightened volatility, closer regulatory scrutiny, and an unprecedented demand for sustainability. Liquid staking has moved beyond being a yield tool—it has evolved into an infrastructure layer that connects multi-chain liquidity, governance, and DeFi returns. If one word were to define Bifrost’s 2025, it would be “DELIVERY” We delivered on the promise of the new tokenomics “bbBNC”, aligning the interests of the community and the protocol more closely than ever before. We delivered on our yield layer vision, extending vToken accessibility to Ethereum and its Layer2 networks. And we delivered on our commitment to long-term product iteration, closing the year with the release of vETH 3.0—establishing the technical foundation for the next phase of growth. What follows is a review of Bifrost’s key milestones and achievements throughout the year. Key Insights Buyback & Profit Sharing Mode on: 100% of protocol profits are allocated to BNC buybacks, with 90% distributed to bbBNC holders, marking Bifrost’s transition into a phase of real profitability and yield sharing vToken minting expanded across the board: vDOT, vBNC, vASTR, and vMANTA all achieved multi-fold growth in staked volume Infrastructure takes shape: multiple cross-chain solutions integrated, enabling vTokens to natively enter heterogeneous ecosystems such as Ethereum, Base, Arbitrum, and BNB Chain Product stack completes a generational upgrade: the launch of vETH 3.0 and SLPx 2.0 solidifies Bifrost’s long-term direction as the staking yield layer. Performance Overview Numbers tell the most honest story. In 2025, Bifrost generated over $8.07 million in total protocol revenue, with gross profit reaching $1.2 million. This marked a clear transition into a more mature phase, driven by sustainable protocol profitability. On-chain activity remained strong throughout the year. Total transactions exceeded 634,000, with nearly 39,000 active addresses. The Bifrost dApp recorded more than 1.16 million cumulative page views and close to 39,000 unique users, indicating the emergence of a stable and recurring user base. Community growth also stayed healthy. By year-end, total community membership reached 138,000, with over 27,000 vToken-holding addresses and more than 130,000 BNC holders. Despite increased market volatility in the second half of the year, minting volumes across multiple vTokens continued to grow significantly—reflecting improved liquidity retention and stronger product stickiness across the protocol. bbBNC: Sharing with Holders This represents the most important narrative shift for Bifrost in 2025. Historically, many DeFi governance tokens have struggled with a fundamental problem: beyond voting rights, holders had little exposure to the economic upside of protocol growth. bbBNC was designed to break this pattern. Built on an enhanced veToken model, bbBNC directs 100% of protocol profits toward BNC buybacks, with 90% distributed directly to bbBNC holders. Market response exceeded expectations. BNC locked rapidly surpassed 16 million tokens, accounting for over 20% of total supply. By year-end, the protocol had cumulatively repurchased more than 1.72 million BNC, of which 172,000 BNC were permanently burned. We believe that only when protocol success is meaningfully aligned with community interests can a truly durable ecosystem be built. vTokens: Broad-Based Growth Across the Stack In 2025, multiple vTokens under the Bifrost umbrella achieved substantial growth, reaffirming sustained demand for liquid staking across multi-chain environments. vDOT remained the core growth engine. Minted supply increased from approximately 7 million at the beginning of the year to 18 million by year-end—representing over 157% growth, with peak issuance surpassing 24 million. vDOT continues to lead the Polkadot ecosystem as its most liquid staking asset. vBNC growth was closely tied to the launch of the bbBNC economic model. As more users opted to lock BNC for protocol revenue participation, demand for vBNC rose in parallel, with minted supply approaching 20 million by year-end. vASTR maintained steady momentum, doubling from 50 million to 100 million over the course of the year. Continued expansion within the Astar ecosystem provided a solid demand foundation. vMANTA experienced breakout growth following the release of vMANTA 2.0. Minted supply rose from 8 million to 22 million, an increase of nearly 175%. Instant minting and improved cross-chain UX were the primary drivers behind this acceleration. vETH 3.0: The First Native ETH LST on Multichains On December 18, Bifrost officially launched vETH 3.0—its most significant step into the Ethereum ecosystem to date. With over $100 billion staked, Ethereum represents the largest value pool in DeFi. vETH 3.0 rethinks liquidity architecture from the ground up, delivering on the vision of “one LST, natively usable everywhere.” Users can mint vETH directly on Ethereum mainnet, Base, Arbitrum, Optimism, and Bifrost-Polkadot, without complex bridging workflows. vETH 3.0 marks Bifrost’s formal entry into the competition for omnichain LST infrastructure. Next, Bifrost will support direct conversions from stETH and rETH into vETH, enabling seamless migration for existing LST holders. Deeper integration with Hydration is also underway, leveraging Omnipool and gigaETH strategies to unlock broader DeFi use cases for vETH holders. Reward Share Program (RSP) The vToken Reward Share Program has become a key driver of Bifrost’s TVL growth. Its premise is simple: partners who help grow Bifrost should continue to share in the protocol’s success. In 2025, the number of RSP partners expanded to 15, collectively driving over $1.8 million in effective TVL. Subscan and WUD emerged as standout contributors. Bifrost’s growth does not rely solely on internal marketing spend. Through ecosystem-level collaboration, partners become both co-builders and beneficiaries of long-term value creation. Liquid Wave: The Power of Community Participation In 2025, Bifrost successfully completed the Liquid Wave airdrop campaign, the largest community incentive initiative in the protocol’s history. The campaign page recorded over 100,000 visits, with 37,131 addresses participating. TVL driven through the campaign exceeded $3.17 million, and more than 135 million WAVE points were distributed. Liquid Wave represented a deep engagement experiment with the community. Through a points-based system and phased tasks, users were introduced to the value of vTokens, experienced the convenience of liquid staking firsthand, and became long-term participants in the Bifrost ecosystem. Security First For a liquid staking protocol managing tens of millions of dollars in assets, security is paramount. In 2025, Bifrost completed several critical upgrades across its technical and security stack. At the protocol level, the Runtime 20000/21000 upgrade series significantly improved performance and stability. AssetHub migration support was completed in preparation for the Polkadot 2.0 era. Deep integration with Hyperbridge established robust cross-chain communication channels, laying the groundwork for multi-chain vToken expansion. On the security front, Bifrost partnered with Immunefi, maintaining a bug bounty program with rewards of up to $500,000. Ecosystem Collaboration Throughout 2025, Bifrost established deep partnerships across the ecosystem. DeFi Singularity was one of the year’s most impactful collaborative initiatives. Through joint incentives with Hyperbridge, the campaign successfully attracted over $4,000,000 in cross-chain TVL, extending vDOT yield opportunities from Polkadot into Ethereum, Base, and beyond. On the developer side, Bifrost partnered with OneBlock and PaperMoon to host a global hackathon with a total prize pool of $12,000. Community and Global Presence In 2025, the Bifrost team traveled to 10 cities worldwide, participating in 27 events. From Token2049 in Singapore to Korea Blockchain Week in Seoul, from Hong Kong to Buenos Aires, we remained committed to engaging with the community both online and offline—sharing vToken updates, discussing DeFi trends, and showcasing the latest liquid staking innovations. These events were not merely about visibility. They served as vital channels for listening, feedback, and iteration. Many of Bifrost’s most important product decisions originated from these face-to-face conversations. Closing Thoughts If “delivery” defines 2025, it refers not to a single outcome, but to a capability. This year, Bifrost chose to do the hard things well: turning tokenomics into real buybacks and revenue distribution, transforming omnichain ambition into verifiable cross-chain functionality, and distilling product iteration into reusable, long-term technical frameworks. We deliberately chose a path without shortcuts—stabilizing infrastructure first and grounding growth in genuine demand. These choices may not always generate the loudest headlines, but they determine whether a protocol remains resilient under pressure. In 2026, we build forward from this foundation: stronger systems, a more diverse product suite, deeper collaboration, and staking yield solutions for stablecoins, DeFi, and real-world assets. In a rapidly evolving crypto landscape, steady progress requires continuous exploration and persistent innovation. What carries us through each phase is a deep commitment to the industry—and the long-term trust of our community. The period at the end of 2025 is also the starting point of 2026. We will continue to turn every promise into the next verifiable delivery. All data in this report is current as of December 30, 2025.