Hotbit AMA🎉: HOTBIT Polkadot 1st丨How Bifrost Can Dominate the Staking Derivative?

AMA content review


💗Host:Daisy Lee

💗Guest:Lurpis,co-founder of Bifrost

Daisy Lee: Hello, everyone, let’s welcome Lurpis, Co-founder of Bifrost to introuce 【HOTBIT Polkadot丨How Bifrost can dominate the Staking derivative?】 to us in AMA. Could you introduce yourself to the community firstly, Lurpis?

Lurpis: Great, thank you, Daisy. Hello everyone, I am Lurpis, the co-founder of Bifrost, and I am very honored to share with you Bifrost and Polkadot. It is my pleasure to be able to participate in the first AMA on Hotbit. I am also the CEO of Liebi Technology and have nearly 5 years of experience in the field of blockchain products and development.

Daisy Lee: Great, You have profound experience in blockchain field.

Lurpis: Yes, our team members are distributed in China, the United States, Russia, and Belgium. Most of the members are also from first-line Internet companies. They have rich product and development experience, and are good at creating products with good user experience. This will also give us a grant from the Web3 Foundation. , Joining the Substrate Builders Program provides a foundation.

Daisy Lee: Thanks for the introduction, Lurpis. Let’s start my questions. Can you briefly describe what is Bifrost? And what makes Bifrost different from other competitors?

Lurpis: Bifrost is a parachain network developed based on Substrate to provide liquidity for Staking assets. It solves three problems:
1)the competition between Staking and DeFi revenue in PoS networks;
2)the problem of Staking revenue generation in cross-chain scenarios;
3)The conflicts between liquidity and security in PoS networks. At present, we’ve received $600,000 seed financing from NGC, SNZ and other institutions and Web3 Foundation Grant, we are also a member of Substrate Builders Program and Web3 Bootcamp.

It is very simple for users to use Bifrost, they only need to convert tokens into vTokens, for example, to take DOTs and convert them into vDOTs via Bifrost, as long as they hold the vDOTs, they can get staking revenue and liquidity.

The concept of Staking derivatives is very similar, but Bifrost’s strengths are mainly in the product experience from the user’s perspective. The advantages are mainly in the higher revenue and settlement of Staking earnings.

On one hand, Bifrost created a role named “bidder”, who is the candidate of validator. Bidders participate in ticket bidding by pledging staking revenue to users in advance, i.e., what percentage of the revenue the bidders are willing to give to Staker. So, bidders are bidding for higher staking revenue to users here and only top revenues can be made a deal first. That’s why users might get higher staking revenue than their original chain. After bidders get those votes, they can vote for validators though Bifrost protocol and get profits based on their investment strategy.

On the other hand, In terms of revenue settlement, there are two major drawbacks to sending revenue quantities directly to user addresses. Firstly, it will cost lots of calculation resources. Secondly, for DeFi, a self-propagating Token is not conducive to cross-chain circulation and widespread participation in DeFi. So, In simple terms, Bifrost breaks the 1:1 exchange rate between derivatives and the originating asset, allowing the exchange rate to change in real time as Staking yields increasing returns.

Under this mechanism, the derivative represents the sum of the principal and revenue, users can receive their yield even if the asset is in Centralized Exchange or wallet.

Daisy Lee: Quite detailed explanation. Next question. Could you please mention about the top milestones and objectives that Bifrost is aiming to execute?

Lurpis: Our priority in 2021 is to push Dapp online and launch Asgard CC4 Testnet connecting with other parachains, so that users can have an experience on our products. We’ve finished all modules design and 80% functions development, hope it will be available in quarter 1 of 2021.

Now, we are preparing the parachain auction plan for Kusama and Polkadot, and it will be announced soon. BIfrost’s mainnet will be launched with the parachain slot, So we have registered Rococo V1, and is awaiting to be plug-in soon.

For PLO participants will face opportunity costs during the lock-in time of their assets. Bifrost has launched the PLO Liquidity protocol, which provides vsDOT and vsKSM (Voucher Slot DOT/KSM) derivatives for other parachains to address the liquidity issues of DOT and KSM during slot auctions.

We have had Initial partnerships with Zenlink and ChainX to provide trading scenarios for vsDOT and vsKSM, and this agreement is in the process of being approved by the Web3 Foundation for a new Grant.

Otherwise, we’ve considered that Polkadot will bridge-up Ethereum in the future, so we deployed the ETH 2.0 Mint Drop campaign, which provides a liquidity solution for users of Ethereum 2.0 who pledge deposit contracts. Our contract received 10,000 ETH of vETH mint on first day, equivalent to $6 million, the campaign was a great success and far exceeded our expectations.

Now, the MInt Drop event has finished, next term will coming up soon, but it will be a pop-up event to win a huge amount of BNC by vETH, quick and fast. Follow our official channel and more detail will be announced soon. Otherwise, vETH yield farming event is ongoing now, you can get your yields in Loopring Layer-2 exchange, more details and tutorial please read:

Daisy Lee: Mention the reasons, why choosing Bifrost as an investment? What are the long-term benefits to be gained?

Lurpis: In fact, we launched a decentralized PoS pool with Staking liquidity before Bifrost was launched, at the time when DeFi and Staking was the crazy and there were no Staking liquidity derivatives on the market. Thanks to this, the product reached nearly 500K USD in just two weeks after launch. So, we accumulated much experience.

Bifrost chose Polkadot to inhabit because we found weaknesses of developing based on single-chain smart contract, its hard to be transfered to multi-chain. After technical research, it was found that the combination of the Polkadot relay chain and the Substrate development framework would be a good solution to this problem, which is why the Bifrost project was born.

The long-term benefits are depending on requirements of Staking liquidity, so we designed several value capture scenarios for our nature Token BNC, which include derivatives liquidity fees, Slash collateral of bidder, governance vouchers and Staking revenues repurchase or burning.

There are 10% of Staking revenue generated through Bifrost will be used for BNC repurchase, which will flow to the treasury for governance issuance or destruction.

In order to ensure that the vToken has sufficient liquidity at an early stage, a substantial portion of BNC is set aside as mint incentive for the vToken, with ten years of linear release and the yield halved every two years.

Daisy Lee: Where are your users mainly coming from and what do you mean by “Regulated” in Bifrost?

Lurpis: Our users are mainly from PoS chain Token holders and parachain slot auction participants. This pair of PoS Token holders, when the market is stable, often hope to get more benefits by participating in lock-up staking. However, once the market has a rising performance, a long unlock period will often make him lose arbitrage opportunities. When the Bifrost protocol supports such tokens, users can obtain staking reward by holding the corresponding vTokens, and at the same time can complete cash out through transactions at any time. Parachain slot participation requires that DOT/KSM be locked for at least 6 months and up to 24 months, which has a higher opportunity cost than staking. Therefore, we will also provide vToken for future parachain card slots to reduce the opportunity cost of users. All of these will be decentralized, and users don’t have to worry about being unable to control their assets. Regarding “Regulated”, Bifrost is a DeFi project that requires access to a large amount of funds, so how to ensure safety and control risks is a key issue we need to consider. For example, how to reduce the risk of being slashed, how to ensure the consensus security of the original chain, and how to deal with it when a slash occurs. It just so happens that tonight our engineer Herry will share details about risk control in Parity and friend. Who want to know the details, can register at this link

Daisy Lee: Bifrost develops many products, which is an advantage when it can meet almost the needs of users. However, does developing many products make management difficult? How do you ensure the quality of all Bifrost products?

Lurpis: Yes, but most of our products revolve around the core issue of staking liquidity. So all businesses e.g. ETH 2.0 deposit, PLO Liquidity solution, vToken are all operated under same logic. They ain’t dispersing our attention to several products. At the same time, our principle is to not conduct public testing when the product does not have a high-quality experience. you could look forward to the Bifrost dapp that we launched in late February 2021. He has been iterating internally for a long time, and finally it’s time for public testing.

Daisy Lee: Thanks for the introduction, Lurpis. I believe our members know more about Bifrost now. But they may have many questions. Now, let’s proceed to the next session public Q&A.

@NguyenAn00: It’s easy to make a token but it’s really hard to make this token valuable? So what’s your startegy to make your token more valuable and what’s your plan to maintain token price and supply?

Lurpis: Yes, whether a project is likely to succeed is essentially to focus on whether it can capture value. This is why I think DeFi has exploded. As Bifrost BNC, there are many ways to capture value, such as the following four examples :

1. Liquidity commission for derivatives

2. Slash collateral

3. Governance Voucher

4. Capture of Staking Reward

@adamlike: Liquidity and transaction fees are always important factors. How does Bifrost solves the above problem to attract users?

Lurpis: Yes, so this is the reason why we chose Substrate for development. I think Polkadot is the first ETH 2.0, a network that takes sharding to the extreme. Bifrost has lower procedures than Ethereum Layer 1. Fees, higher transaction speed, and stronger combination and scalability compared to Ethereum Layer 2.

@ababir251: Most interesting parts of Bitfrost that help an investor to invest in this platform?

Lurpis: Yes, not only can you invest, but you can also lower the threshold for participating in staking. For example, if you purchase vDOT directly, it is equivalent to completing staking, and you don’t need to care about how to operate Bond and nominate validators.

@tu78669: Trust is very important in business, what makes investors, customers and users feel safe when working with BIFROST FINANCE?

Lurpis: Good question, the blockchain itself is a machine for building trust. First of all, Bifrost is completely decentralized, and users are in charge of their own assets, but the premise is that they have sufficiently robust code. Currently, Bifrost is already cooperating with three auditing companies. Conduct a joint audit of the future Bifrost code and issue a complete audit report after the audit. I believe that decentralized finance will create the safest financial world under the premise that the code has no security risks.

@RRFJGB: What is the structure of this project , is it decentralized or a open sourced protocol where everybody can contribute? If so, how does the governance plan on being handled?

Lurpis: Bifrost is an open source and decentralized protocol. If you are interested in, you can give our code repository a Star :). Bifrost is a Polkadot parachain and shares the consensus of the Polkadot network. Security. At the governance level, Bifrost also retains the same governance method as Polkadot, with modules such as coucil, technical committee, treasury, democratic, etc.

@Nickkiii: Why Bitfrost has launched the PLO liquidity pool? Can you tell us about your partnership with Zenlink and ChainX. What is the main reason behind this partnership? How this can be beneficial for both project?@bifrost_finance

Lurpis: Kusama and Polkadot parachain slots may be a big hot spot in 2021, which contains a lot of opportunities for the need to lock the DOT/KSM to participate in the parachain slot auction, which will lose participation in other parachains. The opportunity cost of the chain, and through Bifrost for parachain slot auctions, you can get vsKSM/vsDOT as a voucher to transfer the bidding rights at any time. And Zenlink and ChainX will provide trading venues for vsKSM/vsDOT

@haodifia: Does Bifrost TOKENS have any Coin Burn / BuyBack systems or any Token Burn plans to increase the value of tokens and attract investors to participate in investments?

Lurpis: There is no inflation for BNC, the total supplement is 80 million. Every time of vToken mint represents that a part of value will be used to repurchase BNC, and also every mint will get BNC as rewards.

@mamunc:In which mainnet it will launch?

Lurpis: After we complete the slot auction, we will launch the mainnet in the form of a parachain. The current possible plan is to participate in Kusama’s early parachain slot auction.

@nusrat1224: How can users stay updated with this project? Are there channels, including local communities where users can get the latest updates?

Lurpis: You can follow us on Medium Twitter and Telegram, we will post the development progress every week




@Soikot4: DeFi project is very popular and there are many DeFi projects right now, what are your plans for now? what makes BIFROST FINANCE unique?

Lurpis: 1. Able to support cross-chain assets

2. Derivatives with rigid returns

3. Solve the problem of competition between DeFi and Staking in the PoS network (this will be highlighted in ETH 2.0 and Polkadot)

I believe that 2021 will still be the year leading DeFi, and there will be more updated gameplay, please don’t miss it.

Thanks everyone, that’s all.

Daisy Lee: If you want to know more about Bifrost or have more questions about Bifrost, please check:

Bifrost’s website and community links can be found here.