vETH
Contents
vETH 2.0 (price apprreciating mechanism)
What is vETH?
Bifrost non-custodial liquid staking solution will let users stake their ETH and receive vETH (voucher ETH) in exchange . vETH is one of the voucher tokens in the Bifrost vToken set , which represents the liquid-staking derivative of staked ETH . By using the bridge between Ethereum and Polkadot, vETH can exist in both EVM and Substrate asset formats, making it easy to move between the Polkadot and EVM ecosystems. The underlying mechanism behind vETH is run by the Bifrost Staking Liquidity Protocol (SLP) contract on Ethereum.
Staking rewards automatically add to the vETH exchange price, no manual claim. The longer vETH postion holding, the greater amount of ETH can be exchanged back while redemption.
Why vETH?
Liquidity and capital efficiency
ETH has no liquidity during the locking period, but a derivative of locking ETH can be easily transferred or traded . Hence, vETH (voucher ETH) as a locking ETH derivative can provide users an option to hedge risk during unforeseen market conditions (price decline during locking period). As a result, allowing holders the capability to manage their exposures and funds.
Automatically Staking rewards capturing without scenario limitations
Staking reward apprecates the value of vETH. vETH Value = SLP pledged ETH(SUM) / vETH Total Issuance. Thus, vETH automatically appreciating the value with staking rewards wherever it is
No Technical Background Needed
Minting ETH to vETH which represents holding a representation in-locking ETH with staking rewards, requires no technical knowledge for users in running with Ethereum validators.
Extra yield generating opportunities
vETH represents staked ETH, but simultaneously is also a yield bearing liquid-derivative, which means it can be used in various DeFi scenarios such as liquidity provision and farming on DEXs, as well as in borrowing and lending use cases. Specifically, vETH can be deposited as a collateral asset for yield leveraging on money markets.
Cross-chain (future development)
Since Bifrost is a decentralised cross chain Liquid Staking Derivative (LSD) hub which connects with many different chains, vETH can be crossed back to Bifrost Substrate (with Snowfork bridge solution), and it has furthermore potential to be crossed to different networks such as Ethereum, Polkadot, Kusama, Moonbeam, Astar and many other parachains. Thus, paving the way for various cross chain DeFi utility opportunities for vETH.
How it works?
vETH 1.0 (rebasing mechanism)
vETH 1.0 contract address: https://etherscan.io/token/0xc3d088842dcf02c13699f936bb83dfbbc6f721ab
vETH 1.0 was launched when the ETH 2.0 concept was initiated. However, it has since been replaced by ETH-PoS. At that time, the Ethereum mainnet did not support principle or reward withdrawals for staking. Therefore, the Bifrost foundation provided claimable staking rewards in advance as payment for vETH staking rewards. Thus, vETH 1.0 used a rebasing mechanism.
vETH 1.0 Workflow:
Users transfer ETH to the vETH Batch Deposit Contract. Once 32 ETH have been reached and multi-signed by 3/5 parties (check multisig parties), the contract will transfer the ETH to the vETH Mint Contract. Upon receiving the ETH from the Batch Deposit Contract, the vETH Mint Contract will issue vETH for users and deposit ETH to the Ethereum beacon chain.
Check all ETH deposit rewards at here.
vETH 2.0 (price appreciating mechanism)
vETH 2.0 contract address: https://etherscan.io/token/0x4Bc3263Eb5bb2Ef7Ad9aB6FB68be80E43b43801F
Since Ethereum Shanghai/Capella upgrade launched in Ethereum Beason Chain, this Ethereum Improvement Proposal enables rewards to be automatically withdrawn to the execution layer, and also provides a way for exited validators to unlock their entire balance.
vETH 2.0 is a new contract which includes some major functions:
Upgrade vETH underlying mechanism to price increasing.
Support vETH redeem back to ETH.
Support vETH 1.0 transform to vETH 2.0.
Unclaimed vETH 1.0 reward will be increased in vETH 2.0 price.
Add MEV rewards in vETH staking reward.
vETH 2.0 Workflow:
vETH Mint
Users transfer ETH to the SLP contract (Staking Liquidity Protocol Contract). The contract immediately calls the vETH Mint Contract to mint vETH at currently vETH-ETH rate and transfer it to users. Then, it transfers the ETH to the ETH Deposit Contract. Once 32 ETH have been reached and multi-signed by Multisig Management Contract, so the fund will be deposited to Ethereum beacon chain.
The Relayer is an off-chain service that queries staking status and data from the beacon chain. It then feeds this information to the SLP contract to regularly adjust the vETH price.
vETH Withdraw
When users initiate vETH withdraw, they need to send vETH to SLP contract, then it will be burned by vETH Mint Contract. Then, SLP contract calls ETH Deposit Contract for withdraw. Once 32 ETH have been reached and multi-signed by Multisig Management Contract, so ETH Deposit Contract requests withdraw from Ethereum beacon chain.
After waiting in the Withdrawal Queue (learn what the Withdrawal Queue is), the payout will flow back to the ETH Deposit Contract and SLP Contract. The SLP Contract will then match the payout with the user's address and finalize the withdrawal.
Further Improvements
Unlike vETH 1.0, the vETH 2.0 contract is an upgradable contract, which means that in the future it will add more features through upgrades to help vETH achieve higher security, decentralization and more utility.
Distributed Validator Technology (DVT)
In a short term, the initial version of vETH 2.0 will still using the mannel multisig manner to confirm validator parameters with other operator paries and then deposit ETH to beacon chain, which is a semi-automatic way.
However, the emergence of DVT has provided us with a new idea. Platforms using DVT technology can provide Bifrost with distributed validator management and automated parameter checking and staking. When using DVT, a distributed validator key is created as a group of BLS private keys that function as a threshold key for participating in proof-of-stake consensus. To ensure that a distributed validator can remain online even if a subset of its nodes go offline, the key shares must be generated together.
Compared to the original multi-signature scheme, DVT offers more powerful distributed node management capabilities, single-point risk control, and automated management. It will serve as one of the important upgrade paths for vETH.
Fast Redeem
Fast Redeem is a universal feature built into all vTokens that helps users shorten the duration of their staking redemptions. Its operating logic involves matching stake orders with redeem orders, and assigning any un-staked stake tokens to the redeem orders to facilitate quick withdrawals.
However, Ethereum's redemption process cannot be canceled during the redemption period, which adds additional complexity to the Fast Redeem feature. This feature will be deployed in future upgrades with a more ideal solution.
Ethereum and Polkadot Bridge
Bridge is a crucial link connecting Ethereum and Polkadot. This means that vETH will be able to benefit from the shared consensus security of Polkadot and interact with the numerous parallel chain ecosystems in Polkadot. To achieve this goal, we need a decentralized bridge that is compatible with both Ethereum and Polkadot consensus. Snowbridge will be our preferred solution.
vETH 2.0 Contracts
MevVault
0x6b2BB0F47cB73b15F7EF421F7B4736f1c174D5b5
SLPCore
0x74bAA141B18D5D1eeF1591abf37167FbeCE23B72
SLPDeposit
0xB959Ab725D012e64D2EBDFB841e9fD9734bB0F27
vETH2
0x4Bc3263Eb5bb2Ef7Ad9aB6FB68be80E43b43801F
vETH2Claim
0x8B741CacC856dadab5A2444AEB6C1ceeBd801636
WithdrawalVault
0xFCC2ECEd3C050A1F4D9c4611dD78c9c618191d43
ETH2.0 Deposit Records
vETH minting refers to the process in which users invest any amount of ETH to participate in Ethereum 2.0 staking and obtain the corresponding certificate vETH. After minting, users can sell vETH at any time to gain liquidity. vETH minting.
vETH minting vETH will be divided into four stages to achieve complete decentralization, and is currently in the second stage of development. The ETH invested by users will be put into the official Ethereum 2.0 Deposit contract to complete the staking operation. This operation process is transparent and open, but the smart contract calling process is more complicated. The contract calls involved are 4 levels of concatenated calls:
Multisig Management Contract » BatchDeposit Contract » vETH Mint Contract » ETH 2.0 Official Deposit Contract
The BatchDeposit contract is upgradeable, and a layer of proxy contract is encapsulated on it. There is a Worker account in the BatchDeposit contract, which can be replaced by multi-signature operations, and is specially used to store the Deposit parameters on the chain. This Worker role is currently played by Bifrost. After the Worker fills in the parameters, it can initiate another transaction that triggers Deposit. After multiple partners have signed and approved it, the ETH invested by the user will be deposited into the Ethereum 2.0 official Deposit contract.
The parameters filled in by Bifrost are currently provided by InfStones and Ankr respectively, and are double-checked by InfStones and Ankr before multi-signature approval. After each multi-signature operation is completed, the Deposit transaction information will be publicly displayed in the community, and users can check the corresponding parameter information through Etherscan. Through these parameter information, the actual staking income can be queried and counted. Before the launch of the Bifrost mainnet, staking rewards are distributed in the form of ERC20-vETH. After the Bifrost mainnet goes online, all ERC20-vETH will be mapped to the Bifrost mainnet, and the subsequent staking income will be reflected in the minting price adjustment formula. Check how Bifrost vToken works.
Multisig Parties
Address
Parties
0x4882328c14bb1a9a5c4F5E2B21bE345A72A1f638
InfStones
0x0620Ca0ca30c917aB62d119E5d91A9a954d31604
LongHash
0x146eE71e057e6B10eFB93AEdf631Fde6CbAED5E2
Ankr
0x4f62839ccD37c9a41999ceDB71cc9B4E8B2eBB97
DFG
0xdd4bB59E9088987CbEe31cC5a8e63cD8FEC12065
Bifrost
The current parameter configuration is that any 3 of the 5 participants sign the Deposit operation to take effect.
Check Multisig
https://gnosis-safe.io/app/#/safes/0x7c7FCb39BAA90f2FDef625e7B0b0e858D579CD8E/transactions
MintDrop Contract
https://etherscan.io/address/0xec1d6163e05b3f5d0fb8f354881f6c8b793ad612
vETH Contract
https://etherscan.io/address/0xc3d088842dcf02c13699f936bb83dfbbc6f721ab
https://etherscan.io/token/0xc3d088842dcf02c13699f936bb83dfbbc6f721ab
vETH Minting Records (Updated on 2021-02-18, Deposit total 162 x 32 = 5184 ETH)
1 Deposit (InfStones first test) https://etherscan.io/tx/0xb2387953eb774cfc9744b2fdb92ef4fb59f51df4efeff5ce8f583be5bc223061#eventlog
9 Deposit (InfStones) https://etherscan.io/tx/0x57b76faf452a57301c6cdbb9fdebd8b549f42cac826cf22d9d1d3b19401f5940#eventlog
10 Deposit (InfStones) https://etherscan.io/tx/0x8aa70ff63a5a1819a165cb558b3ed2597cd13ee39ef0abf7008386ca78656424#eventlog
27 Deposit (InfStones) https://etherscan.io/tx/0x8c87a2fce07a98a09a37ded12a460cb2c3868950392b369941c6a8fa63ea4a99#eventlog
1 Deposit (Ankr first test) https://etherscan.io/tx/0x046647b4e948e5a6a89bdb5da7c40d73564669a61d0b8a516bd2bd42adb46967#eventlog
14 Deposit (Ankr) https://etherscan.io/tx/0x9153c1f2db67a650bf1a2c6607311633abac06c5434ae819d864e3b3e1c34acd#eventlog
50 Deposit (InfStones) https://etherscan.io/tx/0x45f9f2ce3f6f74333b5e6e88fba0f97e315f24473f9218ccd36ebea43e9cc3e0#eventlog
50 Deposit (InfStones) https://etherscan.io/tx/0x6aa751437e978f1323c75f7c954c8dad5287d9d131cead625e00be3f3f1fe065#eventlog
Updated on 2021-03-11, Deposit total 200 x 32 = 6400 ETH
50 Deposit (InfStones) https://etherscan.io/tx/0x15db182214e0d88f27953cbddc587aa4b28a191aa6800c8a01366dc5b0aed450#eventlog
50 Deposit (InfStones) https://etherscan.io/tx/0x171683982ddcf4ab1f0a6e2770e46cb0eccf843a9a67fed872127c1ff89f27dd#eventlog
50 Deposit (Ankr) https://etherscan.io/tx/0x3efacae16c2a95c0be67f202044de7e7706e9c9db69789a9d71490c732091162#eventlog
50 Deposit (Ankr) https://etherscan.io/tx/0xabbf2fc950e384e250479fbcd4837a53b2f1de07a6b1b539b6aca1c979906e3b#eventlog
Updated on 2021-03-25, Deposit total 100 x 32 = 3200 ETH
50 Deposit (InfStones) https://etherscan.io/tx/0xcd60dd1daa8b7b6566f7d156a9bc573c85908bb5dd0a3cc6e3e2635beafc17aa#eventlog
50 Deposit (InfStones) https://etherscan.io/tx/0x61d0f288118d56f1de975609df0850c4c22c0918f03db51af6ea3b7642a512ad#eventlog
Updated on 2021-04-12, Deposit total 100 x 32 = 3200 ETH
50 Deposit (Ankr) https://etherscan.io/tx/0x811ea4c01284b9c04f81df3867693e9d675888f955cf0f883ec7df959b8cb5ae#eventlog
50 Deposit (Ankr) https://etherscan.io/tx/0x7a6bacb0c17fd7ec3da220850a4a8b271bc4c785e76f60905f74a00bfc6d4d1b#eventlog
The total amount of ETH deposited in the Deposit contract: 5184 + 6400 + 3200 = 17984 ETH
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