Bifrost Annual Report - 2023

Bifrost Finance
10 min readJan 2, 2024

If 2023 had to be summarized in one word, it would be “growth”.

This year, Bifrost launched two new liquid staking tokens (LST) with vASTR and vFIL. Post Shapella, the vETH contract was updated, and existing LSTs, “ vTokens”, have seen significant growth, especially for vDOT, which has increased by a whopping 19x. This has propelled Bifrost’s overall TVL from USD 43.5 million to USD 110 million, representing a growth of over 150%.

During 2023, Bifrost’s on-chain liquidity has also seen significant growth. Meanwhile, the liquidity of vTokens has migrated to our new Stable Swap pool, allowing users to enjoy lower slippage and more efficiency in their asset swapping experience.

Bifrost actively explored the trends within Liquid staking and the broader industry by addressing certain shortcomings around liquidity and user fragmentation, and launched the SLPx pallet. This module allows other chains to remotely call relevant functions of Bifrost’s Staking Liquidity Protocol (SLP), completing remote minting, remote redemption, and remote swaps of vTokens. This unlocks the potential for cross-chain combinations of LSTs, which is important in promoting the integration of vToken.

During the year, the Bifrost team organized and participated in numerous online and offline events, actively promoting the advantages of Bifrost’s dedicated liquid staking architecture and how it leverages off Polkadot.

Furthermore, Bifrost has also made significant progress in community building and protocol governance, as it moves towards further decentralization.

Next, we will take a comprehensive look at Bifrost’s 2023.

Expansion and Growth of vToken

On March 28th, Bifrost launched the Filecoin LST, vFIL. Within 48 hours of its launch, over 13,000 FIL (worth $350,000) were minted to vFIL. By the end of the year, the number of FIL minted to vFIL exceeded 90,000, a near sixfold increase. vFIL is the first DePIN LST launched on Bifrost, marking a new strategic direction for the protocol!

On April 12th, the highly anticipated Ethereum Shanghai upgrade was completed, and Bifrost upgraded the vETH contract from version 1.0 to version 2.0, enabling the unstake function. Through incentives, we have guided users to replace vETH 1.0 with vETH 2.0.

On October 16th, Bifrost launched the LST for Astar, vASTR. By the end of the year, over 8,400,000 ASTR have been minted to vASTR, valued at over $1,000,000.

In addition, existing vTokens, including vDOT, vKSM, vBNC, vGLMR, and vMOVR, saw significant increases in their overall TVL. The growth of vDOT was particularly notable, mainly due to the Polkadot Unlock Harvest initiative launched in October, which led to a large number of DOT locked-in slot auctions being minted to vDOT.

Liquidity Building

vToken/Token trading pairs are suitable for stablecoin exchange algorithms similar to Curve, known as Stable Swap. In 2023, we have gradually migrated the liquidity pools for vKSM/KSM, vDOT/DOT, vBNC/BNC, vGLMR/GLMR, and vMOVR/MOVR to our Stable Swap pools.

When vETH upgraded to the 2.0 contract, we also rebuilt the liquidity pool for vETH2.0/WETH in the Balancer protocol that supports Stable Swap. We partnered with Aura Finance for bribe voting incentives to build liquidity for vETH.

The liquidity pools for vFIL/FIL and vASTR/ASTR were directly established as Stable Swap pools.

Currently, the liquidity in each vToken/Token pool is very abundant. Coupled with the efficient market-making algorithm of Stable Swap, users can enjoy an extremely low slippage and efficient trading experience.

In addition, the Bifrost dApp has added support for cross-chain transfers of Statemint USDT. Bifrost has finally introduced the native Tether USDT on its chain. Based on this, we have established BNC/USDT and vDOT/USDT trading pairs.

Omni-chain LST

In 2023, Bifrost officially positioned its protocol as the Omni-LST protocol and conducted extensive research and practical work in promoting the advantages of its architecture. Leveraging off XCM V3, Bifrost achieved fully trustless and decentralized communication between Polkadot parallel chains.

Even if Bifrost is offering heterogeneous LSTs such as vETH and vFIL, vDOT, vKSM, vASTR, vGLMR, and vMOVR, these assets are all minted by the SLP module on the Bifrost chain, and therefore they are standardized.

In April, Bifrost has released the “More on vToken” series of articles, enumerating various possibilities of cross-chain integration centered around remote calls. On October 12th, in collaboration with O-Daily, we hosted the Bifrost SLPx Online Launch Event, underlining the significance and expansion direction of the SLPx module to the community and to developers.

In October, we released the SLPx module, which supports users to directly mint vTokens on remote chains without transferring assets to the Bifrost chain. For example, in the case of remote minting of vMOVR, users can directly mint MOVR into vMOVR on the Moonriver network through the Omni LS Dapp.

This process involves two XCM cross-chain communications, one from Moonriver to Bifrost chain and back, which users don’t need to be aware of.

As the first remote call case for SLPx, HydraDX used their treasury address to cross-chain call Bifrost SLPx and minted 81,800 vDOT.

We believe this remote calling method represents a more advanced multi-chain application paradigm, as it allows applications to be deployed on a single chain while permitting users from any chain to use it. Simultaneously, it also offers the advantages of unified liquidity and better cross-chain integrations and user experience.

As part of our builder initiatives, Bifrost participated in two hackathons: the OneBlock x Polkadot 2023 Summer Hackathon (which began on June 9th) and the Polkadot x Angel Hack co-hosted APAC Edition Hackathon (which began on September 7th).

Bifrost also participated as a judge and launched a Special Bounty and Grants Program related to Omni-LST to encourage developers to implement various applications and use case scenarios based on remote calls.

As the first full-chain LST protocol, Bifrost has become a proponent of full-chain architecture. We have also published several research reports, highlighting the characteristics and advantages of Bifrost’s full-chain architecture.

Brand & Events

To increase brand exposure and business collaboration opportunities, Bifrost continued to actively organize and participate in various events throughout 2023, actively sharing and showcasing Bifrost’s unique advantages and solutions. Throughout the year, Bifrost’s co-founder Lurpis and core team members visited 12 cities in 9 countries, attending numerous offline events.

In terms of online events, Bifrost organized 6 Bifrost Liquid Sessions X space series, inviting heavyweight guests from EigenLayer, Parity, BitTensor, Centrifuge, to Vertex Protocol to discuss various hot topics and trends within the industry. These sessions collectively attracted hundreds of attendees.

Simultaneously, as an invited speaker, Bifrost participated in a total of 13 online events and discussions, including formats such as Space, Meetup, roundtable, and live broadcasts. The topics covered Polkadot 2.0, the Filecoin ecosystem, Ethereum and L2s, Polkadot’s economic model, cross-chain interoperability, the current and future state of LST, RWA, and many more.

Community Building

Global Community

In 2023, Bifrost’s Twitter account has surpassed 80,000 followers, with over 1,000 tweets, accumulating more than 3,000,000 views; 34,500 likes; 9,000 retweets; and 3,300 comments. The total number of members in Bifrost’s global community on Discord has reached 18,450 with an increase of over 3,000 members over the year.

In February, we launched the Bifrost Airlyft space, a platform primarily targeting English-speaking users. This year, all four of our major operational activities were initiated here. Users received incentives such as our native asset, BNC, or our NFT “Back to Asgard” whitelist by completing specific on-chain and off-chain tasks on the platform. Currently, Bifrost’s Airlyft space has gathered 2,400 followers.

Chinese Community

Bifrost’s Chinese Twitter was established last year, and currently has 4,428 followers, with 322 tweets posted, and a total of 105,200 views. Bifrost’s Discord community has always been purely English-speaking. However, on August 24th, we officially established a Chinese channel on Discord, which now has over 1,183 members.

As the Bifrost Chinese community continues to expand and develop, on May 24th, the Bifrost Chinese community launched the Zealy Task Center. Community members can choose tasks on the Zealy platform to complete and earn XP experience. While receiving rewards, they can contribute more efficiently to the community.

Through the Zealy task platform, Bifrost can also launch various limited-time leaderboard tasks to incentivize specific user behaviors. By the end of the year, Bifrost had launched four rounds of leaderboard tasks, distributing a total of 8,000 BNC rewards.

Governance & Decentralization

The governance system upgraded to OpenGov

In sync with the development of Polkadot’s OpenGov system, both the Bifrost Kusama and Bifrost Polkadot chain governance systems have been upgraded to OpenGov, achieving complete decentralization of governance. The previous “tri-chamber system” (Referendum, Council, and Technical Committee) has been abolished, and all decisions are made through the referendum track, with the Fellowship wielding influence over the governance process through the power to accelerate proposals.

Nova Wallet has launched compatibility with Bifrost Polkadot’s governance functions. Users can now directly participate in Bifrost Polkadot governance using Nova Wallet.

SLP Validator Autonomous Election

The whitelist election for Bifrost’s SLP validator nodes has been conducted in a fully decentralized manner within a specific track of Bifrost OpenGov. Bifrost itself does not operate any nodes, and nodes can add themselves to the SLP node whitelist through the proposal and voting process.

vToken Voting

One of the greatest achievements of Bifrost LSTs, vTokens, compared to other ecosystem LSTs is Bifrost vTokens maintaining governance rights on the origin chain. Users can use vToken to participate in on-chain voting governance, for example, using vDOT to participate in Polkadot OpenGov voting. This functionality is achieved through a cross-chain mapping module in the Bifrost protocol.

In September and October, we successively launched the vKSM voting and vDOT voting features, with more vToken voting features currently under development.

The reason for providing this functionality is that Bifrost aims to always remain a neutral protocol and not interfere with the governance of the original PoS chain. The vToken Voting feature ensures that vToken minters main their governance rights of the original Token and also ensures that the original chain is not at risk of a protocol accumulating governance rights via large quantities of vToken minting.

Partnerships

In 2023, we established partnerships with numerous projects.

Through collaborations with DEX platforms, including Balancer, Aura Finance, Arthswap, Beamswap, MangataX, Zenlink, Stellaswap, and Picasso, Bifrost established liquidity pools for BNC and vToken on multiple chains.

Partnerships with DeFi protocols such as HydraDX, Interlay, EQ Finance, Starlay Finance, and DIA enhanced vToken integration and expanded the utility of vToken.

Collaborations with wallet service providers, including Enkrypt, Metamask, WalletConnect, imToken, TokenPocket, Nova, SubWallet, and Talisman, increased access for more users to utilize Bifrost dApp services, providing users with diverse options.

Through partnerships with hackathon organizers such as AngelHack, Encode, and OneBlock, Bifrost became a significant participant in multiple hackathons within the Polkadot ecosystem, and through specialized bounties, identified high-quality projects beneficial to the Bifrost ecosystem.

Partnerships with Airlyft and Zealy established our task platform, enhancing the efficiency of operational activities.

Collaborations with Staking Communities such as LuckyFriday, Iceberg Nodes, and Staking Rewards provided Bifrost with high-quality node resources.

Partnerships with media outlets and Social DAOs including Downtown Moonbeam, Kusamarian - Space Monkeys, Promoteam, Polkadot Insider, Polkadotters, Polkaworld, Polkawarriors, CIK - BlokTalk, DotCast, AIweb3, Astar Degens, GLMR Apes, and PMAD Crypto, gave Bifrost exposure in various events, enhancing its influence.

Extra

Bifrost Wiki has been officially renamed to Bifrost Docs, with a reorganization of document formatting. This includes the addition of Quick Start tutorials for various functionalities, the latest Tokenomics for BNC, an introduction to Bifrost OpenGov, and other related content.

To enhance user experience, we have launched the Flexible Fee feature, which allows users to pay on-chain fees for Bifrost using tokens such as DOT and KSM. This also means that in cross-chain operations like remote staking, users can pay fees for all stages using a single token.

On December 24th, amid the fervor of the “National Engraving” celebration, developers within the Bifrost ecosystem deployed the first engraving project - BNCS - on the Bifrost Polkadot chain. The engraving mint lasted for three days, from the 24th to the 27th.

During this period, the Bifrost-Polkadot chain successfully withstood the test, experiencing no lag or crashes. Over the three days, the Bifrost Polkadot network consumed nearly 300,000 BNC in Gas and processed nearly 1.5 million transactions, averaging over 1,100 transactions per block.

2024 Roadmap

For Bifrost, 2023 was a year of rapid progress.
It was intense, quite busy, but fruitful.
In 2024, our journey will continue!

Our focus remains on expanding vToken, including:

  • Launching more vTokens
  • Supporting vTokens’ Voting
  • Establishing more cross-chain bridges to enable vTokens to seamlessly enter ecosystems such as Ethereum L2, EVM, Cosmos, and others, creating conditions for more comprehensive cross-chain integration of vToken
  • Collaborating with partners to develop more vToken use cases, including leveraging collateral, lending, and more.

In addition, we will continue to strengthen our foundations:

  • Further refining the core functionality of Bifrost Chain, Bifrost Dapp, and Omni.LS to enhance performance and user experience
  • Updating the economic model of BNC to adapt to business development
  • Enhancing governance systems to drive decentralization
  • Improving operational systems, including advancing Raindrop on-chain tokenization

A more detailed 2024 Bifrost Roadmap will be released and made public soon.

We thank all our users and partners for their support, as well as every team member for their efforts and dedication in the past year. We will cherish the moments we are proud of and set off toward a more brilliant future!

--

--

Bifrost Finance

Bifrost Finance is a parachain designed for staking’s liquidity