Treasury

The Bifrost Treasury manages protocol funds through on-chain governance. Anyone can apply for treasury funds via a governance proposal.

Treasury Income

• Staking commission fees (10% reward fee from each vToken)

• Transaction fees (% of Bifrost chain gas fees)

• System Staking income (60% of SST revenue)

• vToken Swap fees (portion)

• LoopStake fees

Treasury Expenditures (via Governance)

• Slash insurance / anti-risk measures

• Bifrost ecosystem grants

• System arbitrage

• BNC buybacks

• Marketing & events

• Liquidity provision for trading pairs

System Staking allows idle Bifrost tokens that have not participated in Staking to be cross-chain staked, thereby increasing the overall revenue of the protocol and vTokens.

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System Staking

System Staking allows idle Bifrost parachain tokens (treasury reserves, LP tokens, etc.) to be cross-chain staked, increasing overall protocol revenue without user action.

How It Works

1. SST DAO evaluates idle assets on-chain and submits configuration proposals to SST Track

2. Community votes pass the configuration

3. SST Pallet receives and executes the configuration

4. SST automatically:

   • Temporarily issues tokens based on configured amounts

   • Stakes them as vTokens

   • Executes periodic payouts to distribute vToken appreciation

Composition and Mechanism

System composition

The chain-level functional modules and decentralized governance DAO jointly form the basis for the operation and development of System Staking, mainly including the following parts:

Part	Info
System Staking Pallet	The main chain-level functional logic module, which implements and operates the core logic of System Staking
System Staking Track	Based on OpenGov, a referendum governance track specially designed for efficient governance to execute System Staking related management operations
System Staking DAO	Composed of core contributors and active members of the community, responsible for managing and initiating governance related to System Staking operations and continuously maintaining and updating the System Staking mechanism

Operating mechanism

1. SST DAO statistics and evaluates the situation of idle assets on the chain, and initiates relevant configuration governance referendum on SST Track.

2. Bifrost community participates in SST Track governance referendum and passes it.

3. SST Pallet receives and executes the parameter configuration passed by the referendum.

4. SST automatically executes the corresponding chain logic, the main logic is:

   • Temporarily issue tokens according to the number of tokens that can be executed by SST.

   • Cast the temporarily issued tokens into vTokens.

   • Regularly execute Payout to distribute the extra value of vTokens to each module (refer to Income Distribution).

   • When the number of available tokens of SST decreases, vTokens will be redeemed automatically as tokens, and the temporarily issued tokens will be destroyed to keep it equal to the SST setting value.

Tokens that can be used for SST

• Bifrost Treasury Token Reserve

• Bifrost Treasury LP Corresponding Token Reserve

• vToken Arbitrage Module Token Reserve

• SALP Token Buyback Reserve (for DOT and KSM)

• Token Deposited in Farming Pallet in the Long Term

• Token Reserve of the Parachain Sovereignty Address when Asset Reserve Risk is Low

Income Distribution

Item	Ratio	Info
Treasury	60%	This portion of the revenue will be entered into the Bifrost Treasury and homogenized with other treasury assets, and subsequent secondary distribution will be more reasonable and flexible through treasury governance
vToken MEV	20%	This portion of the revenue will be shared with all vToken holders by directly increasing the exchange rate of vToken-Token through the direct destruction of the corresponding revenue vToken
veBNC Incentive	20%	This part of the profits will be directly entered into the veBNC incentive pool, following the veBNC incentive distribution principle, and incentivizing long-term holders of BNC.

Risk Management

Asset Reserve Ratio:

User Asset Reserve Ratio =
  Available Tokens in Bifrost parachain /
  (Total Issued Tokens - SALP Redeem Pool - Bifrost Treasury & System tokens)

Risk Level	Reserve Ratio
Low	> 90%
Medium	60–90%
High	< 60%

Risk disposal mechanisms:

1. Issue high-interest token bonds to attract liquidity

2. Enable single-token farming to attract tokens

3. Launch vToken minting incentives

4. Initiate short-term treasury loans to fill reserve gaps