vBNC is Live! BNC Liquid Staking & LP Farming Pools will be open soon!

4 min readDec 22, 2022

Bifrost Native Coin (BNC) is the key to unlocking Bifrost’s groundbreaking network. Thirty-two active Collators have put over 6.25M BNCs to work for the parachain - unlocking tremendous capability and growth potential for anyone interested in staking their tokens!

Today, Bifrost’s SLP protocol comes alive with the launch of vBNC, expanding its users’ options by unlocking liquidity for previously locked BNCs. Through this new solution, individuals entrust their BNCs to collators in return for revenue generated from within the network.

vBNC Benefits

vBNC is a Staking derivative that operates under the SLP protocol and it includes the following unique features of the value proposition of vTokens:

Automatic Staking Returns: As an interest-bearing asset, vBNC allows the holder to earn staking returns automatically without any action.

Higher Staking Returns: Various factors affect Staking returns, including collator performance, the PoS network mechanics, and the collator’s commission rate. The SLP protocol uses an algorithm to evaluate collators and automatically optimize the commission strategy, resulting in higher staking returns than manual evaluation. In addition, the SLP protocol takes a more comprehensive look at the security reputation of the collators to avoid the risk of Slash to the greatest extent possible.

Free flow: vBNC carries the liquidity of locked BNCs. It’s transferable throughout the Polkadot and Kusama ecosystem, a tradable asset in the public market, and involved in other DeFi applications across chains to gain more revenue.

Redeem at any time: vBNC is redeemable as BNC at any time. Normally, redemptions require a 7-day wait for the unbonding cycle, but the SLP protocol automatically matches minting requests and redemption requests peer-to-peer, shortening the redemption cycle. Lightning redemptions by Swap through the vBNC-BNC liquidity pool are also available.

vBNC & Farming Pool Online date

vBNC Online: December 22nd at 10 AM UTC

vBNC-BNC farming pool： December 26th at 1 PM UTC

Collators Perspective

Collator’s commission earnings will increase significantly after the launch of vBNC. They will benefit from the SLP Protocol, enabling more returns.

Compared with individual delegators, the SLP protocol will be more rational, procedural, and automatic when selecting entrusted collators.

At the same time, the vBNC launch attracts more stakers, increasing BNC’s staking ratio. Higher BNC deposits will enlarge the cake, growing the overall income of Collators.

Our initial delegation quota is 10; therefore, users will entrust 10 collators when staking their BNC. SLP will allocate commissions under the condition that the commissions to each node account for no more than 25% of the total staked amount of each collator. Where the requirement is unfulfilled, we will moderately expand the delegate set.

Part of the collators that can enter the delegate set come from the collators in the white list (VWL). Whether they enter the white list depends on the collator’s score. Currently, the main factors affecting collator scoring are:

Collator’s historical rate of return
The reputation level of the collator (evaluated based on the real name information provided by the collator)

The calculation formula is:

rating = averageReward * isCertified * 10000 / totalBond

in:

averageReward is the historical average earnings of the node in the past 84 Era
isCertified is the reputation level of the node
totalBond is the current total bond amount of the node

The reputation level is divided into the following levels, and the corresponding coefficients are as follows:

According to the above scoring algorithm, the current elected Top10 collators and their scores are as follows:

For more node ratings, please copy the link below to view:
https://docs.google.com/spreadsheets/d/13YdCMc_bVdmy5My22mWRTC5ITwVEaRZQi4fIZGr8tSw/

Implementation of vBNC Technology

Since BNC is Bifrost’s native Token, the minting and redemption of vBNC can be directly implemented locally on the Bifrost-Kusama chain without using XCM cross-chain messaging.

Minting

The user calls the SLP protocol to lock BNC into the Bifrost sovereign address. The SLP protocol mints vBNC for the user according to the current exchange rate, and then the SLP protocol entrusts the locked BNC to the Collator to start staking.

Redemption

The user calls the SLP protocol, initiates a redemption application, and destroys the vBNC. The SLP protocol redeems the corresponding amount of Staking BNC for the user according to the current exchange rate. After the unstaking is completed, users receive their BNC.

Ready Pool

There is a Ready Pool mechanism in the minting and redemption process. Before all mining and redemption applications take effect, they will first be matched with the reverse request in the network to achieve fast redemption.