# Protocol Growth Flywheel

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1. **Growth of $BNC Market Cap**

   Higher BNC value capture (via protocol profit buybacks and burn mechanisms) increases Bifrost’s market capitalization, driving expansion of Liquid Staking Token (LST) use cases.

   * 100% of protocol profits are used for [<mark style="color:purple;">BNC buybacks</mark>](https://docs.bifrost.io/overview#core-engine-buy-back-and-revenue-sharing), with 90% distributed to bbBNC holders and 10% burned, creating a deflationary token model.
2. **Expanding Use Cases and vToken Yield Enhancement**

   More LST use cases (e.g., DeFi lending, leveraged staking) boost vToken’s comprehensive yield ([<mark style="color:purple;">base staking yield</mark>](https://app.bifrost.io/vstaking/vDOT?tab=dashboard) + [<mark style="color:purple;">vToken senario yield</mark>](https://app.bifrost.io/vstaking/vDOT?tab=scenarios)). Higher yields attract more users to mint vTokens.
3. **vToken Minting and Protocol Revenue Growth**

   Increased vToken minting directly drives protocol revenue through liquid staking fees.
4. **bbBNC Holder Returns Amplification**

   Protocol revenue growth feeds back to bbBNC holders via buybacks, delivering higher annualized returns. Benefits include:

   * Direct dividends (90% of protocol profits)
   * Governance advantages for ecosystem decisions
   * Farming yield boosts (e.g., vToken liquidity mining incentives).
5. **Positive Growth Flywheel Formation**

   A closed-loop cycle emerges:

   BNC value ↑ → LST use cases ↑ → vToken yields ↑ → Minting volume ↑ → Protocol revenue ↑ → bbBNC returns ↑ → More BNC locked → Reduced BNC supply → Further value capture.