Crypto Ser

Governance is one of the most powerful ideas in DeFi — but also one of the least used.
Bifrost has just introduced a proposal that directly addresses this problem:
Should active governance participation be rewarded with real economic incentives?
As someone who follows DeFi closely — especially the Polkadot ecosystem — I think this proposal is an important step forward, not just for Bifrost, but for on-chain governance design in general.
Let’s break it down in simple terms.
The Core Problem: Governance Is Undervalued
Right now, governance on many DeFi protocols (including Bifrost) faces a few common issues:
Many BNC / vBNC / bbBNC holders don’t clearly know where or how to vote
There’s often strong discussion, but low actual voting turnout
Governance feels like a “responsibility” rather than a rewarded action
At the same time, Bifrost has entered a new phase focused on buybacks and profit sharing.
That makes governance even more important — because decisions now directly affect long-term value.
So the question becomes:
How do we turn passive token holders into active protocol participants?

The Proposal: Incentivize Governance Participation
Bifrost is asking the community to choose one of two incentive models, via on-chain voting.
👉 You vote AYE on the option you support, and NAY on the other.
👉 The winning option will be implemented.
Option A: Governance Participation Affects bbBNC APY
🔗 Referendum: https://bifrost.subsquare.io/referenda/189
How it works (simplified):
If you actively participate in governance, your bbBNC APY increases
If you stay inactive, your yield may be lower
Governance becomes part of the core yield logic, not a side activity
Key characteristics:
Long-term, structural incentive
Strong alignment between governance and economic value
Requires on-chain upgrades and more development time (≈ 6 months)
Option B: Governance Participation Earns Lottery Tickets
🔗 Referendum: https://bifrost.subsquare.io/referenda/190
How it works (simplified):
Each governance action earns lottery tickets
Periodic draws distribute rewards from a prize pool
More participation = more chances to win
Key characteristics:
Fast to launch (≈ 2 months)
No on-chain logic changes required
Flexible campaign-style incentives
Rewards are probabilistic, not guaranteed
UX Improvements (Regardless of Option)
No matter which option wins, Bifrost will upgrade its governance UX:
Clear proposal list with voting stats
One-click participation using BNC / vBNC / bbBNC
Transparent display of voting status and lock conditions
Depending on the chosen option, users will also see:
APY impact dashboards (Option A), or
Lottery pages with tickets, pools, and draw info (Option B)
This is already a big win for accessibility.
My Personal Take as a DeFi & Polkadot Content Creator
Both options are valid — but they serve different goals.
Why Option B Makes Sense Short-Term
If the goal is:
Quick participation boost
Low technical risk
Immediate feedback on incentive effectiveness
👉 Option B is very practical.
Lottery-style rewards are familiar in crypto and can attract casual users who normally ignore governance.
Why I Personally Lean Toward Option A
From a long-term protocol design perspective, I find Option A more compelling.
Why?
It treats governance as productive work, not a game
It aligns yield, ownership, and responsibility
It encourages consistent participation, not one-off actions
It strengthens bbBNC as a “governance-aligned asset”
Yes, it’s more complex and slower to ship — but structurally, it’s closer to what mature DeFi governance should look like.
If Bifrost wants governance to be a core pillar, not a marketing campaign, Option A sets a stronger foundation.

Bifrost is taking a meaningful step forward in liquid staking with the launch of vETH 3.0, built on top of its next generation infrastructure, SLPx 2.0. From a professional DeFi content creator’s view, this upgrade is less about incremental changes and more about redesigning how staking liquidity should work in a multi chain world.
vETH 3.0 is Bifrost’s multi chain liquid staking token for ETH, supporting Ethereum, major Layer 2s, and Polkadot without requiring users to manually bridge assets. It is ERC 4626 compatible, which makes it easy to integrate into lending protocols, AMMs, and other DeFi applications as a standard yield bearing asset. Validator decentralization is enhanced through Distributed Validator Technology using SSV Network, and the base yield of around 3.5 percent is competitive with most existing ETH liquid staking tokens.

The core upgrade comes from SLPx 2.0. By adopting an async pool model and the ERC 4626 vault standard, Bifrost removes many of the frictions seen in earlier cross chain staking systems. Minting is instant, redemptions are faster and batched, and fees are significantly reduced because cross chain operations are handled in the background instead of per transaction.

Compared to SLPx 1.0, the new design is more scalable, more cost efficient, and much easier for DeFi protocols to integrate. Liquidity is managed at the chain level, exchange rates follow an eventual consistency model, and the system is built to expand smoothly across new networks.

Together, vETH 3.0 and SLPx 2.0 reflect where liquid staking is heading: standardized, composable, and truly multi chain, turning staked ETH into active capital across the DeFi ecosystem.

Executive Summary
The year 2025 marked a structural turning point for both the crypto industry and the liquid staking sector. While institutional inflows via ETFs continued, the broader market faced heightened volatility, stricter regulatory oversight, and growing demand for sustainable revenue models.

Against this backdrop, Bifrost completed its transition from a liquid staking provider into a multi-chain staking yield infrastructure. The protocol focused on execution over narrative, delivering measurable progress across tokenomics, revenue generation, cross-chain expansion, and product maturity.
This report summarizes Bifrost’s performance, strategic milestones, and ecosystem impact throughout 2025.
Market Context
In 2025, liquid staking evolved beyond its original function as a yield-enhancing mechanism. Leading protocols increasingly served as infrastructure layers that connect:
Staked assets with on-chain liquidity
Governance participation with economic incentives
Multi-chain DeFi ecosystems with native yield access
Bifrost positioned itself directly within this transition, prioritizing long-term protocol alignment over short-term growth incentives.
Protocol Performance Overview
Bifrost entered a new phase of operational maturity in 2025, achieving sustainable protocol revenue and consistent user activity.
Key Performance Metrics:
Total protocol revenue: $8.07M+
Gross profit: $1.2M
Total transactions: 634,000+
Active addresses: ~39,000
Community size: 138,000
vToken-holding addresses: 27,000+
BNC holders: 130,000+
Despite increased market volatility in the second half of the year, vToken minting volumes remained resilient, indicating improving liquidity retention and product stickiness.
Tokenomics & Value Distribution: bbBNC
A central development in 2025 was the launch and adoption of bbBNC, Bifrost’s enhanced veToken model.

The bbBNC framework redirected protocol economics toward direct holder participation:
100% of protocol profits allocated to BNC buybacks
90% of bought-back BNC distributed to bbBNC holders
Year-End Outcomes:
Over 16M BNC locked (20%+ of total supply)
1.72M BNC repurchased
172,000 BNC permanently burned
This model addressed a long-standing issue in DeFi governance tokens by establishing a direct link between protocol performance and tokenholder value.
vToken Growth and Adoption
Bifrost’s vToken suite experienced broad-based growth across multiple ecosystems.

vDOT: Minted supply increased from ~7M to 18M, with peak issuance exceeding 24M, reinforcing its position as the leading Polkadot LST.
vBNC: Growth accelerated alongside bbBNC adoption, approaching 20M minted supply.
vASTR: Doubled from 50M to 100M, supported by steady expansion within the Astar ecosystem.
vMANTA: Increased from 8M to 22M following the release of vMANTA 2.0, driven by instant minting and improved cross-chain UX.
Growth across multiple assets reduced reliance on any single ecosystem and strengthened Bifrost’s multi-chain footprint.
vETH 3.0 and Ethereum Expansion
On December 18, Bifrost launched vETH 3.0, representing its most significant expansion into the Ethereum ecosystem.
vETH 3.0 introduced a native, omnichain liquidity design allowing users to mint vETH directly on:
Ethereum Mainnet
Base
Arbitrum
Optimism
Polkadot (via Bifrost)
This architecture removed traditional bridging complexity and positioned vETH as a cross-chain Ethereum LST. Planned upgrades include direct conversions from stETH and rETH, as well as deeper DeFi integration through Hydration’s Omnipool and gigaETH strategies.
Ecosystem Growth & Incentive Programs
Reward Share Program (RSP)

In 2025, Bifrost expanded its RSP to 15 partners, collectively driving over $1.8M in effective TVL. The program aligned long-term ecosystem contributors with protocol revenue rather than short-term incentives.
Liquid Wave Campaign
The Liquid Wave airdrop campaign represented the largest community initiative in Bifrost’s history:
100,000+ campaign page visits
37,131 participating addresses
$3.17M TVL generated
135M WAVE points distributed
The campaign emphasized user education and long-term engagement over transactional participation.
Infrastructure, Security, and Reliability
Bifrost continued to prioritize infrastructure resilience and protocol security throughout 2025.
Key initiatives included:
Runtime upgrades (20000/21000) improving performance and stability
AssetHub migration preparation for Polkadot 2.0
Deep integration with Hyperbridge for cross-chain communication
Immunefi bug bounty program with rewards up to $500,000
These investments reinforced the protocol’s readiness for increased scale and cross-chain activity.
Community & Global Presence

The Bifrost team participated in 27 global events across 10 cities in 2025, including Token2049 Singapore and Korea Blockchain Week. These engagements served as feedback loops for product iteration and ecosystem alignment rather than pure marketing efforts.
Outlook
By the end of 2025, Bifrost had demonstrated its ability to convert strategic vision into measurable delivery. The protocol entered 2026 with:
Proven revenue generation
Aligned tokenomics
Multi-chain staking infrastructure
A growing and engaged user base
Future development will focus on expanding staking yield solutions into stablecoins, DeFi-native assets, and real-world assets (RWAs), building upon the infrastructure established in 2025.

O staking de Ethereum é o maior motor de rendimento em DeFi, com mais de $100B em staking. Mas enquanto os usuários se mudaram para Layer 2s como Base, Arbitrum e Optimism, o staking líquido de ETH ainda está principalmente preso na mainnet—criando atrito, custos mais altos e liquidez fragmentada. 👉 vETH 3.0 da Bifrost resolve isso.
O que torna vETH 3.0 diferente?
vETH 3.0 é o primeiro LST criado para staking nativo de ETH multichain.
Minte vETH diretamente no Ethereum, Base, Arbitrum, Optimism e Polkadot
Um LST unificado com rendimento sincronizado em todas as cadeias

À medida que o Web3 amadurece, a tokenomics não se trata mais apenas de lançar um token; trata-se de projetar um sistema econômico de longo prazo que alinhe construtores, usuários e capital.
Bifrost é um forte estudo de caso dentro do ecossistema Polkadot. Sua tokenomics não surgiu totalmente formada; em vez disso, evoluiu através de três estágios claros, cada um correspondendo ao nível de maturidade do protocolo.
Por que a Tokenomics é o núcleo do Web3
Tokenomics é o que fundamentalmente diferencia o Web3 do Web2. No Web3, os tokens não são apenas ativos especulativos, mas sim ferramentas de coordenação. Eles permitem que os protocolos: