Intro
- Bifrost is a modular programmable dedicated liquid staking middle layer serving the omnichain ecosystem. Built on Substrate, powered by Polkadot.
- By leveraging Polkadot’s cross-consensus message format (XCM) Bifrost can provide standardised cross-chain liquid staking solutions for multiple chains, currently Polkadot (vDOT), Kusama (vKSM), Moonbeam (vGLMR), Moonriver (vMOVR) and other chains notably vFIL (Filecoin).
- Bifrost facilitates the issuance and deployment of liquid staked assets (“vTokens’ '), allowing users to earn staking rewards while participating in DeFi, such as liquidity provisioning on DEXs, and lending/borrowing on protocols like Moonwell.
- Bifrost aims to offer a seamless staking and DeFi experience for PoS users and enable developers to build innovative applications around Bifrosts’ liquid staking derivatives (vTokens).
- Bifrost’s flagship products are both the liquid crowdloan tokens (vsTokens) issued by Bifrost’s Slot Auction Liquidity Pallet (SALP) and the liquid staking tokens (vTokens) by the Staking Liquidity Pallet (SLP).
- Bifrost vTokens are reward bearing liquid staking tokens which represent the users staked asset, including returns from staking. As staking rewards are received, vTokens increases in value, without any change to the quantity of tokens
- vDOT, Bifrost liquid staking token for staked DOT has seen meaningful month on month growth, recently surpassing 1,500,000 DOT in total value locked (TVL) representing roughly $6M. In addition, vGLMR, the first liquid staking token for staked GLMR has recently surpassed 5,280,000 GLMR in TVL, representing roughly $1M.
What is Bifrost and its vision
Bifrost is a modular, scalable, non-custodial omni-chain liquid staking parachain based on Polkadot and Kusama. It provides standardized, high-yield, secure, and reliable underlying interest-bearing liquid staking tokens (LST) through XCM, and is realising the omni-chain vision of using any LST on any chain. For more details on our vision check our recent polkadot forum post here.
As a DeFi protocol, Bifrost is aiming to solve the following issues in PoS ecosystems:
- The paradox between Staking rewards and DeFi yields
- The balance between Token Staking/Circulating and security of PoS chains
- Staking rewards in cross-chain scenarios
Our main objective is to integrate Bifrost’s SLP with Polkadot XCM to create a product with XCM features. Based on the feature of cross-chain invocation, developers can remotely interact with Bifrost SLP pallet in parachains that support any environment, truly achieving the multi-chain expansion of DeFi protocols. Furthermore, the key properties of vTokens are homogeneity, standardisation, unified liquidity and yield bearing, in order to achieve interoperability and cross-chain DeFi interactions, we have recently launched the SLPx. The SLPx is an extension pallet to Bifrost SLP that will allow users to invoke SLP’s functionality on a remote chain without crossing assets into the Bifrost chain, allowing users to mint, redeem, swap vTokens remotely on the target chain. For users, the minting, redemption, and swapping of vTokens have been simplified, as they can now be directly performed on EVM chains such as Ethereum and parachains such as Moonbeam, Moonriver and Astar without cumbersome cross-chain operations all through one single interface, the recently launched Omni LS DApp powered by SLPx.
Bifrost SLPx Architecture
More information on SLPx technical integration
How does vDOT & vGLMR work?
vDOT and vGLMR are reward bearing liquid staking tokens issued by the Bifrost SLP pallet. Let us refer to vDOT for instance - vDOT represents staked DOT on the Polkadot Relay and returns from staking. As staking rewards are received, vDOT increases in value, without any change to the quantity of tokens. Additionally, vDOT is also a fungible and tradable asset. with unique features such as Fast-Unstake, Stable Swap, Automatic validator selection, cross-chain voting. For more details about the underlying technological logic of vDOT and vGLMR, please refer to the links below:
vDOT: vDOT - Bifrost Docs
vGLMR: https://docs.bifrost.finance/builders/liquid-staking-slp/vglmr-and-vmovr
vDOT DApp screenshot below:
Check it out
For vDOT : https://bifrost.app/vstaking/vDOT
For vGLMR : https://bifrost.app/vstaking/vGLMR
OpenGov+Automatic Validator Selection:
https://docs.bifrost.finance/builders/liquid-staking-slp/vdot#vdot-validator-se
Recent developments and ecosystem collaborations
Developments and features
- Use cases for vDOT in cross-chain scenarios: Bifrost has completed the asset registration of all vTokens on the Moonbeam and Moonriver networks. Users can use the Moonbeam App bridge to interact with xcvDOT and transfer assets between Bifrost and Moonbeam… More importantly, with the recent launch of the Omni LS DApp powered by the SLPx, users can invoke SLP functionalities such as mint, redeem and exchange Bifrost vTokens from a single interface with one click from any chain like Moonbeam and Moonriver without crossing assets to Bifrost.
- vToken voting functions on the original chain: This feature allows users to participate in governance on the original chain with their vToken. This feature is currently supported on Kusama’s OpenGov governance (vDOT will be the next) on Bifrost parachain. It is currently in the final testing phase and is expected to be launched on the Bifrost Dapp next month. For more details, please refer to this tweet.
- vToken Stable Swap: A dedicated LST Stable Pool which achieves low slippage swaps between LST and its original token. All vTokens on Bifrost Kusama and Polkadot have been adapted for the Stable Swap. For more information regarding the mechanism please check here and on the DApp.
Ecosystem collaborations, case studies
- vDOT Vault on Interlay: Interlay has proposed vDOT as collateral for Vault creation, allowing anyone to choose vDOT as collateral when establishing an IBTC Vault on Interlay. The staking reward feature of vDOT will enhance the collateral income for Vault creators, enriching the revenue attributes of Interlay Vault collateral.
- vDOT on Interlay lending markets: Bifrost is currently proposing vDOT as a collateral asset for Interlay lending markets to the community. The objective being to increase the base income for lenders who deposit IBTC, DOT, or any other asset as collateral in the lending market and increasing their yield through leveraged staking by rotating borrowed DOT stake to vDOT and depositing it as collateral.
- vDOT minted by HydraDX Treasury, via XCM: HydraDX used the treasury address to cross-chain invoke Bifrost SLPx and minted 81,800 vDOT, which was automatically transferred back to HydraDX to enrich the treasury revenue. By leveraging off SLPx, this transaction was completed in one step, more details here
Why bring vDOT and vGLMR to Moonwell?
The overall liquid staking market has grown significantly post-Shapella upgrade as the largest sector within DeFi. Furthermore, we have observed on Ethereum that yield bearing assets like LSTs are becoming a primary collateral asset within DeFi on lending and stablecoin protocols, a trend which we think will only grow as the sector matures. Additionally, we believe that the adoption and growth of this sector will only proliferate to other ecosystems such will the need for scalability and interoperability of these LSTs, to which we firmly believe Bifrost is well positioned to serve.
Benefits for Moonwell Community
- vDOT and vGLMR would be the first liquid staking tokens listed as collateral assets on Moonwell’s deployment on Moonbeam. Users are provided an additional option in the market and can increase their income by earning from the underlying yield of vDOT and vGLMR with the lending/borrowing APY.
- Leveraged staking with vDOT and vGLMR can provide an additional strategy to users with different risk profiles. This would allows you to leverage their staking to maximise staking returns. In other words, they would be able to supply their vDOT and vGLMR as collateral to borrow DOT and GLMR against the vDOT and vGLMR, then restake the borrowed DOT and GLMR for more vDOT and vGLMR. This process could be repeated as much as the users risk profile and objectives allow.
Why vDOT and vGLMR in particular?
- The growth of vDOT in the past year: over 900% in vDOT volume recently exceeding 1,500,000 DOT.
- vGLMR is the first liquid staking token for staked Moonbeam: recently surpassing the 5,280,000 in vGLMR minted.
- Bifrost vTokens such as vDOT and vGLMR are non custodial, permissionless liquid staking tokens issued by Bifrost SLP. They are Polkadot-native assets.
- Bifrost full-stack architecture allows both vDOT, vGLMR and other of Bifrost vTokens to achieve robust cross-chain integration. The pivotal element of this architecture is the utilization of our parachain to host the SLP protocol, while simultaneously deploying remote modules on other chains. This innovative approach allows users and applications on various chains to seamlessly access and leverage the SLP protocol through remote calls.
- vDOT and vGLMR will allow users to participate in governance on the original chain, thus users will retain governance rights whilst earning their yield and not being capital restrained.
- As a Substrate protocol, we can naturally upgrade functionalities easier than smart contract competitors, which means we have more flexibility on product upgrades;
- Special functionalities such as quick redeem. Bifrost supports a flexible redemption period, with our matching mechanism allowing for users to unstake faster than native staking redeem.
Security
At Bifrost we put significant emphasis and attention on security. Details below
All of Bifrost’s code is open source: Bifrost · GitHub
We have our formal documentation describing the mechanism and logic of our protocol, pallets and of the liquid staking tokens, vTokens, that are issued by the protocol.
Bifrost and its features have been audited by various high quality third party blockchain smart contract security auditors (Slowmist, Certik, Common Prefix, Beosin).
Bifrost has an open bug bounty on Immunify.
Path to vDOT and vGLMR on Moonwell
The main objective of this proposal is to enable users to have the opportuning of borrowing assets such as USD stables against Bifrost liquid staking tokens, such as vDOT and vGLMR.
Stage I: Preparation
The two main prerequisites for adding both vDOT and vGLMR as collateral on Moonwell are:
- Sufficient vDOT & vGLMR liquidity on native Moonbeam DEXs to guarantee successful liquidations and flashloans;
- A vDOT & vGLMR market price feed by an oracle provider supported by Moonwell.
As a result, Bifrost has identified the following goals for Stage I:
- Build native vDOT & vGLMR liquidity on Moonbeam DEXs. (Ongoing)
We are starting to build both vGLMR and vDOT liquidity on Moonbeam this month. We are currently finalising our pools on Moonbeam’s two largest DEXes which will launch within the coming days with our campaigns related to the recent launch of our SLPx tech development on Moonbeam and the upcoming DOT Unlock.
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xcvGLMR/GLMR on Beamswap
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xcvDOT/xcDOT on Beamswap and Stellswap *
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Given the DOT Unlock and In order to build for deep native liquidity, we have recently obtained a GLMR incentives grant of 250,000 GLMR to incentivize vDOT pools on both Beamswap and Stellaswap.
- vDOT & vGLMR Oracle Support (Ongoing)
We have been working very closely with both Chainlink and DIA to have both vDOT and vGLMR supported.
- Chainlink (Ongoing). Moonwell supports Chainlink price feeds. Given the recent launch of the SLPx contract on Moonbeam, Bifrost is exploring the Chainlink Proof-of-reserves (PoR) model for additional transparency. Given that Chainlink is hesitant to use Graph API as the source of number of DOT staked by validators for a vDOT PoR feed, Bifrost is exploring the option of deploying a PoRAddressList contract where Chainlink can read validators addresses and have their node query each of staked balances and do a total sum.
- DIA (Ongoing). Bifrost team is working with DIA to enable a market price based feed for both vDOT and vGLMR. A liquidity requirement of >$2M is needed as such Step I is a requirement. Bifrost has previously worked with the DIA team to enable vDOT as a collateral asset for iBTC.
Stage II: Activate vDOT & vGLMR Markets on Moonwell (To DO)
As we start building liquidity for vDOT and vGLMR this month as native pools go live with these targeted Airlyft campaigns and the GLMR incentives, we will then suggest activating both vDOT and vGLMR markets on Moonwell by submitting a governance proposal. We believe that standard market price feed requirements for both these assets will be met as we submit the proposal. Finally, we believe that the PoR feed is a needed addition that will be supported but may not be needed at the immediate launch of vDOT and vGLMR markets.
Stage III: Enable vDOT & vGLMR as Collateral assets on Moonwell
Once vDOT and vGLMR markets are activated and live, ecosystem contributors such as Gauntlet and Warren Finance can assess and recommend risk parameters adjustments to these new asset markets. If the markets were activated with conservative risk parameters such as a 0% collateral factor, these values can be adjusted upwards in the future as liquidity for vDOT and vGLMR builds up on Moonbeam.
Call for Community Feedback
We would like to call both the Moonwell, Bifrost, and broader Moonbeam and Polkadot communities to share their thoughts and provide feedback on this initial proposal.
Liquid staking is a fundamental pillar within DeF and the demand for yield bearing assets as a de facto collateral will only grow, as such, we believe that Bifrost is naturally well positioned to drive liquidity and users to Moonwell, Moonbeam and the broader Polkadot ecosystem.
Resources
- Mint vDOT: https://bifrost.app/vstaking/vDOT
- Mint vGLMR: https://bifrost.app/vstaking/vGLMR
- Website: https://bifrost.finance/
- Full documentation: https://docs.bifrost.finance/
- GitHub repo: Bifrost · GitHub
- Medium: https://bifrost-finance.medium.com/
- Community: Discord ; Twitter
