LBank AMA Recap with Bifrost
1. What is BIFROST?
Bifrost is the Polkadot Ecological DeFi basic protocol. It is committed to becoming an infrastructure for pledged assets to provide liquidity. It has launched a derivative vToken for Staking and Polkadot Parachain Slot Auction (SALP). It has obtained $2.15M in fund-raising from NGC, SNZ, DFG, CMS and other institutions and Web3 Foundation Grant. It is also a member of Substrate Builders Program and Web3 Bootcamp.
2. Talk to us about why you want a Parachain slot.
An important reason why Bifrost chose Polkadot’s ecosystem is that it doesn’t need to maintain a set of consensus by ourselves. This is also an obvious advantage of being a parachain to connect with the relay-chain, which enjoys the parachain shared security provided by all parachains. Maintaining a set of consensus security requires a lot of investment in capital and labor costs; It doesn’t make sense for a creative organization to quickly produce a killer application. So, after we accumulated development experiences and researched about single-chain and multi-chain framework, we finally decided to develop Bifrost by Substrate, and becoming a parachain will enable us to accumulate the liquidity from different PoS chains to Polkadot layer-one, with shared security, but not only a smart contract.
At the same time, Bifrost can use smart contracts to deploy services on heterogeneous PoS chains outside Polkadot. For example, our Ethereum derivative vETH will become an ERC-20 and Substrate base dual-asset after bifrost mainnet on parachain is launched, and it will take much external value to Polkadot ecosystem beyond building bridges.
3. Users participating in the Kusama slot auction will face a lock-up period up to 48 weeks. How does Bifrost unlock the staking liquidity during this period? What’s the new utility to KSM?
Yes, we have completed the development of a solution that allows users to release liquidity during the bidding bonding period: slot auction liquidity protocol, which we call SALP, and the product page is expected to meet with you soon.
SALP is Bifrost’s original creation. Our original intention by studying slot auction derivatives is to help users unlock the liquidity of the 6–48 week KSM bonding during slot auction. At the same time, considering the uneven auction redemption period and other factors that may affect the liquidity of derivatives, Therefore, we create derivatives vsToken and vsBond, which represent asset utility and equity attributes.
Users can buy and sell vsToken at any time to enjoy liquidity, and hold vsBond to receive auction rewards issued by the parachain. This is something that other slot liquidity projects cannot do. As a financial product, disrupting utility for different parachains will cause a serious problem: low liquidity, which will make it hard to form a healthy derivative market in a long way, and low liquidity will crash the experience of derivative users.
So Bifrost separates these two derivatives. With vsToken, it can build an aggregative derivative market for all parachain bondings with high liquidity. With vsBond, it can build a Pending order market for parachain rewards, without liquidity.
We can say that SALP will create another utility for KSM. In an article of Polkadot explaining parachain and auction, it mentioned: “Many DOT holders may want different utility options than staking can provide. Thus, it’s natural that DOT holders would want to loan their DOT to projects who require DOT for a bond in exchange for some consideration.” Soon, KSM will have the third utility: Derivative market utility feature.
4. Why design vsToken as a fungible token? What are the problems with issuing different derivatives for different parachains?
The lower the degree of homogeneity, the worse the liquidity. Issuing different derivatives for different parachains will result in a situation where each derivative needs to provide liquidity separately.
Non-fungible factors such as different parachain lease periods, different redemption periods, and inconsistent parachain reward strategies have led to the inability to achieve complete fungible derivatives, and non-fungible is an obstacle to liquidity. In contrast, fungible derivatives will put liquidity together from different parachain crowdloans, forming an objective liquidity advantage. Therefore, Bifrost starts with the Token attributes in crowdloan, decouples its attributes to utility and equity, and designs two derivatives: vsToken (Voucher Slot Token) and vsBond (Voucher Slot Bond).
5. There are many Canary networks competing for the first few kusama slots, what is Bifrost’s bidding advantage in it?
Mainnet bidding advantage: Bifrost, as the basic protocol for the DeFi derivative assets of Polkadot, will not issue a Canary network and run two sets of business logic, because doing so will cause the community to split and dilute the liquidity of derivatives. Therefore, the parachain strategy adopted by Bifrost is to run only one mainnet. When the Kusama slot expires, the data will be snapshotted to Polkadot’s genesis block to complete the migration of the mainnet from Kusama => Polkadot, and so our derivative (vToken) usage scenarios have been fully upgraded. Due to the strong binding relationship between the value of BNC and the liquidity of vToken, under the impetus of a complete economic model, the value of BNC will steadily advance with the business development of the main network.
Release KSM lock-up liquidity: Bifrost’s unique slot auction liquidity protocol SALP will support Bifrost slot auction for the first time in Kusama auctions. All KSM pledged through ksm.vtoken.io will receive liquidity derivatives vsKSM+vsBond. The former is used to release liquidity, and the latter is used to receive parachain rewards.
SALP derivatives are rich in usage scenarios: firstly, vsKSM as the basic function of the derivative token will create the liquidity release of vsKSM/KSM, and secondly, vsBond as a semi-homogeneous token will give birth to a parachain-like NFT trading market for reward certificates. In addition to being used to redeem the native KSM, vsKSM+vsBond’s innovative economy mode will be able to obtain rewards from Bifrost and other parachains in the form of pledge mining.
The 50% reward will be released immediately and the transfer will be initiated: Bifrost will initiate the Token Generation Election proposal after the parachain is launched. Once the proposal is passed, all mainnet BNC vouchers will be converted to native tokens and the transfer will be initiated. 50% of the parachain auction rewards will be released immediately, and the remaining part will be released linearly within 48 weeks.
6. What is the project aim for?
Bifrost, the substrate-based differ protocol to PRO electricity for search access. The important thing is that projects, as it includes, taking assets, we were provided sticking throughout it, disruptive for their pledge assets such as the stake and derivative and plus the money, liquidity in different, pus blockchains to achieve the value aggregation amount, a different ecosystem on the product.
We’ve currently launched the vetoes can to the staking derivatives. We can have an example for it. What we aim for? Because in the past year, we can see about 10 billion dollars in the market, and it’s about 80 and 90 % assets. Are using staking. So we saw the opportunity for the next generation of the d five. Maybe it’s not long. Like it’s not long like a compound. It’s going to be the drop of the market for the next wave of the d five. So we will do the release part of that. Stake into our tip as a stake in assets. Return them to derivatives. This part of the value will be gathered together in the pocket out and deeply critical for different postures. And we are not running a bridge on it, but we can aggregate these are assets from different poses — pocket as an as a layer zero. Blockchain can easily connect with these other power chains and different posts. Blockchains. So that’s what we aim to do is to build a. Aggregate of, staking disruptive or disruptive market for all d four a market.
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