Dapp Tutorials & use cases
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Bifrost is a dedicated modular Liquid Staking L1 secured by Polkadot and built with the Polkadot SDK. Over the past six months, Bifrost's TVL has grown fourfold, firmly establishing its position as the leading LST project within the Polkadot ecosystem.
Bifrost has made many notable innovations in the LST space, and its use of dedicative cross-chain architecture may provide significant competitive advantages in the future omni-chain landscape. Meanwhile, Bifrost continues to expand its support for more chains, providing liquid staking services to its ecosystem and beyond.
vToken is an LST asset created by Bifrost, short for Voucher Token. Bifrost currently supports 9 chains and has launched 9 types of vTokens, as shown in the image below:
Among them, vDOT, vKSM, vGLMR, vMANTA, vMOVR, vBNC, and vASTR are all LST assets in the Polkadot ecosystem, with Bifrost's vToken enjoying an absolute dominant market share in the Polkadot ecosystem.
The module used by Bifrost to support vTokens is known as Staking Liquidity Provider (SLP). Bifrost has deployed the SLP module on Ethereum, Bifrost Polkadot, and Bifrost Kusama. The SLP module manifests as smart contracts on Ethereum to support the minting of vETH, while on Bifrost Polkadot and Bifrost Kusama, it takes the form of a runtime.
Bifrost Kusama is the parachain of Polkadot's pioneer network, Kusama, supporting the minting of vKSM, vBNC, and vMOVR. On the other hand, Bifrost Polkadot functions as the parachain of Polkadot, facilitating the minting of vDOT, vGLMR, vASTR, vFIL, and vMANTA.
As cross-chain bridge infrastructure matures, Bifrost will consolidate all vToken minting and management on the Bifrost Polkadot parachain in the future.
The operation of the SLP module is straightforward: users deposit the original tokens into accounts managed by the SLP module. The SLP module then creates voucher/receipt certificates, or vTokens, for users and stakes the original tokens to the network.
SLPx is an extension module developed based on SLP, serving as a developer toolkit that enables the minting of vTokens on any chain. We aim to make it easier for more DeFi applications to integrate vTokens. For developers of DeFi applications on any chain, integrating SLPx requires only a few simple lines of code. After integration, developers can use remote calls to access the minting, redemption, and exchange services of vTokens on the Bifrost Polkadot chain..
Typically, when a user initiates the redemption of vTokens, the SLP module needs to request the corresponding amount of original tokens for unstaking and, after the unbonding period ends, return these original tokens to the user.
Unlike the unlock waiting periods of PoS chains, such as 28 days for Polkadot and 7 days for Kusama, Ethereum does not have a fixed unlock waiting period; it depends on the amount of ETH waiting to be unlocked in the queue. The unlock waiting period is a protective measure implemented by PoS chains to prevent long-range attacks.
Like most LST protocols, Bifrost's vTokens support users in achieving quick redemption through swapping. Bifrost provides a Stable Pool for vToken/Token pairs, adopting a Stable curve similar to Curve Finance to reduce the price impact caused by exchanging.
However, swapping inevitably results in slippage. Bifrost also offers another option for quick redemption. When a user initiates redemption, Bifrost first matches with minting orders in the current queue on a peer-to-peer basis. If the match is successful, the user's redemption will bypass the unlock waiting period and be cashed out immediately.
Although Bifrost charges a 10% commission from the staking yield of vTokens, the yield of vTokens is often higher than that of competitors. This is because the yield of vTokens is diversified. In addition to the basic staking yield, Bifrost also shares the MEV (Miner Extractable Value) earnings of nodes with users. Periodic mint drop events enable vToken holders to receive BNC rewards.
As a neutral protocol layer, Bifrost ensures that users receive all other rights from the original tokens. For example, vDOT users enjoy the same governance rights in OpenGov as those holding DOT, as well as entitlements from PINK and VARCH airdrops. Bifrost strives to minimize any opportunity costs for vToken holders.
Moreover, Bifrost aims to enrich the use cases of vTokens, allowing users to access more diverse earnings and higher compounded yields in DeFi through vTokens. This aspect is crucial, and we will elaborate on it in the following sections.
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