Bifrost launched the ETH 2.0 Staking derivative vETH on November 27. vETH is a dual-protocol asset that supports both ERC 20 and Substrate Based. Holding vETH can earn ETH 2.0 staking reward. vETH will be divided into four stages to achieve complete decentralized governance “How does vETH achieve complete decentralized governance”. The vETH contract has officially opened the “Mint” function, and the first phase of the vETH Mint Drop mint airdrop plan has been launched simultaneously, with a total of 1.25% of the Foundation and a total of 100,000 BNC for vETH mint rewards “Bifrost activates “Mint Drop” event, mint vETH for BNC airdrop.”. This Mint Drop event lasted for a total of 32 days. The highest mint amount was 15,088.7563 vETH, and the cumulative airdrop was 70750.3745 BNC. The total transaction volume was $157,209.7. Please look forward to the next Mint Drop event. You can currently use imToken, TokenPocket, MathWallet, ONTO, AToken to mint vETH.
vETH: Currently Security Implementation of Decentralized Deposit
Bifrost vETH mint contract owner authority transfer
The Bifrost vETH mint contract needs to remove the Sudo administrator authority before the formal deposit of ETH 2.0, to ensure that the deposit operation of ETH is confirmed by multiple parties and eliminate the unilateral risk of misbehavior by Bifrost team. At present, Bifrost vETH mint contract owner authority has transferred to the multisig contract, and the five parties InfStones, Ankr, DFG, LongHash Ventures and Bifrost jointly did multisig to manage private key for ETH 2.0 deposit operations. According to the description in the vETH decentralization roadmap, the current multisig threshold needs to reach 3/5 to successfully complete the process of depositing Bifrost contract ETH to ETH 2.0. All multisig records will be saved on-chain and published in Bifrost Wiki.
Withdraw Key BLS Threshold Signature
Due to the ETH 2.0 design mechanism, smart contracts cannot be supported before the ETH 2.0 Phase 2 is launched. As Bifrost has not released the Mainnet yet, how to secure the Withdraw Key is an issue that requires great attention, After research, ETH 2.0 will adopt BLS threshold signature (corresponding to curve BLS 12–381). In the ETH 2.0 Deposit operation, two pairs of keys are designed, one pair is the Withdraw Key Pair used to withdraw the staking assets, and the other pair is the Validator Key Pair used to participate in the system’s block production. Participating in the system’s block production requires the verification node to remain online, and the risk of key loss is relatively high. Therefore, dividing the staking key into two pairs is beneficial to system security.
BLS threshold signature is a distributed signature technology that allows N members to jointly generate and maintain the same key pair. The public key is transparent and open to verify the signature is correct. The private key is virtual and does not need to exist or be restored, even when a signature is required. No one of the N members has the ownership of the signature. Initiating the signature operation is that any T members of the N members participate in the signing operation honestly. From this point of view, it is very similar to the multisig technology. The difference is that multisig technology requires multiple signatures, while threshold signature technology virtualizes a single account. From the outside, it is no different from ordinary accounts.
In the process of generating threshold signature key pairs, key generation technology (DKG) is required. DKG ensures that among the N members, as long as T members participate honestly, they can recover the key fragments held by any other member, and recover the virtual key, a single or a small number of individual members cannot complete the signature operation alone. Bifrost combined the use of DKG and BLS aggregation signature technology to achieve a complete threshold signature solution. The BLS aggregate signature function allows multiple members to sign message data with their own BLS private keys. The generated multiple signature values can be aggregated into a single signature value through a specially defined calculation. The BLS public keys of multiple members can be aggregated into a single public key after a specially defined addition operation. The aggregate public key effectively verifies the aggregate signature. The Bifrost technical team researched and referenced the academic paper “ETHDKG: Distributed Key Generation with Ethereum Smart Contracts” and the implementation source code https://github.com/PhilippSchindler/EthDKG, but the BLS curve given in the ETHDKG paper is BN128, not BLS12 -381, so Bifrost has already carried out a certain reconstruction based on it.
vETH Staking reward generation and Slash commitment
We are pleased to announce that Bifrost has completed the transfer of the vETH mint contract owner authority to the multisig contract and the generation of the Withdraw Key BLS threshold signature. The successful deployment of the multisig Deposit contract not only means that holding vETH will generate staking income, but also means vETH is closer to complete decentralization.
When the Bifrost mainnet is launched, the ERC20 asset protocol vETH will be supported to be transferred to the Bifrost mainnet through the Polkadot <> Ethereum bridge. At this time, vETH will enter the third phase and become an ERC 20 and Substrate Based dual protocol asset. At that time, the revenue generation and settlement of vETH Staking will be distributed according to chapter 3.2.3 of “Bifrost white paper”. The selection of Validator will be completed by the decentralization of the voting market, and the revenue structure will be based on 10% BNC repurchase fund, 1~5% public Insurance fund, 3% channel fund, 82~86% user distribution (vToken price up) to complete the settlement.
It is currently the second phase of vETH. The Bifrost mainnet has not yet been released. It is temporarily unable to complete the generation of staking rewards through the voting market. InfStones and Ankr, two professional Validator service providers, will provide ETH 2.0 Validator services for vETH. The reward generation structure will be based on 15 % Validator commission (server and maintenance costs), 5% Slash public insurance and 80% vETH issuance. If Slash occurs, the deduction will be made through the Slash public insurance fund. If the public insurance fund is not enough to cover the Slash amount, the Bifrost will bear the Slash loss. If no Slash is generated when vETH enters the third stage, the Slash Public Insurance fund will enter the Slash public insurance pool of the Bifrost mainnet to continue to bear the Slash risk in the future.
vETH Staking Reward Claim
At the current stage, because ETH 2.0 cannot deploy smart contracts, it is impossible to generate rewards by vETH price up from voting market. After team’s consideration, it was decided to distribute staking proceed that based on vETH coin age at early stage, which will be calculated coin age in seconds based on vETH holding time.When vETH crosschain enters the Bifrost mainnet, it will start to increase the token price for staking income distribution. Currently, the coin age liquidation logic is online. When holding vETH, you can check the vETH staking income in the vETH mint Dapp ( Liebi Pool), real-time clearing of vETH coin age, the minimum coin age granularity is 1 second, you can get ETH 2.0 staking income after holding vETH for 1 second. Longer holding time and greater the number of vETH equal to the greater total staking rewards.
The settlement of vETH rewards takes a 24-hour period at T+1 08:00 (UTC+0) to receive the staking rewards of the previous day. To ensure the accuracy of vETH rewards, it expected to be claimed on January 5th. During the period, Bifrost team will observe and test the liquidation data to ensure that the coin age and staking income are calculated correctly.
The Next Event of vETH
After the successful deployment of vETH multisig Deposit, holding vETH can already obtain staking income normally. The function of vETH as a staking derivative has been established. The next step will expand the liquidity and usage scenarios of vETH. Now, Bifrost and Loopring jointly build liquidity for derivatives. Loopring protocol will start a 14-day multi-mining activity on January 7, 2021, including layer 2 AMM liquidity mining, AMM Swap Tournament, and vETH will be listed as the first batch of liquid mining transaction pairs. More details on vETH liquidity mining will be announced on January 5, 2021. You can learn more Loopring AMM Liquidity Mining on Layer 2.
What is Bifrost ?
Bifrost is a Polkadot Ecosystem DeFi infrastructure protocol that aims to become an infrastructure for providing Staking liquidity, and currently offers a derivative vToken for Staking and Polkadot Lease Offering (PLO). It is also a member of the Substrate Builders Program and Web3 Bootcamp. vToken can optimise transactions in multiple scenarios such as DeFi, DApp, DEX and CEX.
vToken can optimise transactions in multiple scenarios such as DeFi, DApp, DEX and CEX. vToken can be used to realise the transfer channel of governance right such as Staking and PLO to hedge the risk of Staking assets. In extended scenarios such as when vToken is used as collateral for lending, the staking proceeds can offset part of the interest and realise low-interest lending.