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01 Polkadot's NPoS consensus mechanism
On May 1, 2022, the second day of the holiday, Solana officially announced another crash of its mainnet Beta. Judging from the results of 6 crashes in January 2022, the public chain under the PoH mechanism still needs a longer time to conquer the market. Under the many consensus mechanisms of today's blockchain, the PoW and PoS consensus mechanisms are still the mainstream. Among them, the PoS public chain goes hand in hand with the PoW public chain and occupies most of the market because of its shorter consensus time than PoW and lower user threshold. Among them, Polkadot is a very typical and highly recognized PoS public chain.
Specifically, Polkadot takesNPoS (Nominated Proof of Stake) Consensus MechanismVerifierNominatorandVerifierTwo roles ensure the stability and security of the public chain. At the same time, it also draws on the proportional representation system, an election method proposed by Swedish mathematicians, to make the network sufficiently decentralized.
Nominated Proof of Stake (NPoS) avoids the Matthew effect and oligopoly caused by Proof of Stake (PoS). A good incentive mechanism enables nominators to select more trustworthy nodes, thereby maintaining the security of the entire network and gaining more Proceeds; use the proportional representation system to distribute the total number of votes of nominators to each node as evenly as possible. Finally realize the decentralization of the Polkadot network and ownHigh safety performance。
However, as DeFi Summer kicks off in 2020, the DeFi track has advanced by leaps and bounds, quickly sweeping through public chains such as Ethereum, and encircling many users and projects with high returns and high returns. Good projects are emerging one after another, and more and more users are turning their assets to DeFi. With the advent of ETH 2.0,The conflict between staking and DeFifirst level title
02 Staking Derivatives
Staking derivatives came into being, by providing liquidity Token to release the liquidity of the pledged Token, so that the liquidity Token can continue to circulate and be used in the market, thus solving the problem that the PoS public chain needs enough Staking assets to obtainsecurity and stability, and meet the needs of users who want to participate in high-yield DeFi projectsasset liquidity, perfectly provides adults with the choice of "both...and...". The timing of its generation, the technology and application innovations brought by it all amazed the industry and users.
Bifrost, as the first batch of projects to obtain the Web3 Foundation Grant and join the Substrate Builders Program, created its own parachain auction derivatives, which has attracted a lot of attention in the Staking derivatives track in the Polkadot ecosystem. Total minted since the launch of Kusama parachain on October 21, 2021$137M in Derivatives,ProvidedLiquidity is $11.04M, 81,297 addresses are held on the chain, and a total of333,921 signed transactions. The soon-to-be-launched SLP protocol is the optimal solution for releasing liquidity, which is proposed in a large amount of user experience and technical practice.
03 The optimal solution for releasing liquidity: SLP agreement
SLP is Bifrost's Staking liquidity protocol, which provides high-yield liquidity tokens for Staking Tokens. The SLP protocol is designed to solve the liquidity problem of a large number of pledged Tokens and maximize the use of Staking assets in the PoS blockchain.release liquidity, bringing usershigher income, bringing ecologicalmore vitality, to provide more stability andSufficient staking assetsimage description
vKSM displayed in bifrost.app
Compared with other PoS liquidity solutions, Bifrost pays more attention toToken liquidity and reward incomefirst level title
04 SLP Step 1: vKSM
Kusama, as a parallel chain, is consistent with Polkadot and adopts the NPoS (Nominated Proof-of-Stake) consensus mechanism, that is, any user holding KSM Token can choose to participate in the security of the Kusama network as a validator and nominator verify. During the process, users pledgedKSM will be lockedTo ensure the security of the network, the Token in the pledged state is locked and can be used for network voting governance, but cannot be transferred. Users cannot withdraw from Staking immediately, and need to go through a period of unbonding to obtain full liquidity of unstaked assets, which reduces liquidity and prevents full application of asset value, especially native Token.
The SLP protocol supports users to replace the original KSM with vKSM. From the perspective of centralized financial product bonds, vKSM is generated through the SLP protocolKSM bonds. vKSM isStakingprincipal plusFuture staking incomeasset portfolio, the corresponding assets can be redeemed at any time using vKSM. Due to the different time for each user to stake, the accumulated Staking income per unit KSM is also different. vKSM is designed to beSplittable homogeneous tokenfirst level title
Liquidity pledge
Liquidity pledge
This product allows users to pledge KSM to obtain liquid vToken, namely vKSM. vKSM will continue to receiveStaking return, and can continue to be used in DeFi based on Bifrost and Kusama to obtain additional income. In short, vKSM can be used as KSM for allsecondary title。
Automatically capture Staking revenue without scene restrictions
When the user mortgages/redempts through the SLP agreement, the system will give a real-time exchange rate. SLP will increase the price of vKSM / KSM toIssue Staking income to vKSMsecondary title
Floating redemption period, vKSM redemption ≤ 7 days
The redemption period of Kusama’s original chain Staking is fixed at 7 days, and Bifrost SLP helps users achievevKSM early redemptionpossibility. In short, when the real-time vKSM minting amount is greater than the current redemption amount, the redemption request will be executed immediately, and vice versa. at the same timeThe redemption process is flexible and operablesecondary title
Higher staking income, node intelligent screening
According to the Sequential Phragmén Method in Polkadot, when a single nominator pledges to multiple nodes, the pledge amount will be automatically calculated and distributed by the algorithm, which may cause the user's ideal rate of return to fail to meet expectations. In the SLP agreement, the agreement screens out more than 10 verification nodes through governance (subsequently increasing with the overall pledge amount), and joinsNumber of nominators, commission ratio, and historical blockssecondary title
06 Why SLP
In recent years, the PoS public chain represented by Polkadot has obvious development advantages, the ecology has become more and more prosperous, and the multiple tracks and multiple gameplays have also attracted more and more users to join. This also means that the Staking derivatives track will continue its development advantages and satisfy more and more user advantages. The SLP protocol will also continue to develop, optimize and iterate on the track.
From the perspective of users, the rate of return of SLP is very impressive. Especially in the initial stage of launch, Bifrost will provide users with additional incentives. The SLP launched yesterday is now waiting for investors Ape in to enjoy the early dividends. At the same time, the liquidity incentive will support users to continue to participate in the benefits, and the system operation will also provide high subsidies.
On the premise of high income, the multiple available scenarios also bring more income possibilities. Not only Kusama mentioned above, vToken also has rich interoperability and combined application scenarios among major parachains. at the same time withSmart contract parachainIn-depth cooperation, open up andInteroperability of EVM/WASM, vToken will appear in more mature and prosperous ecology.
SLP's high-liquidity vKSM, on the basis of meeting the low pledge threshold, after the user stakes KSM, he still holds itsFull Control of Assets. At the same time, vKSM can also be used for circulation in the market, and you can continue to participate in DeFi. Its revenue opportunities increase,yield increase, The risk of lock-up is greatly reduced.
At the same time, the SLP agreement can be combined with the lending of the DeFi track to derive the "Staking leverage" gameplay, which will bring more income possibilities to users. PolkadotCross-chain features, and also supports vKSM to operate in other parachain DApps, not only focusing on the DeFi track, but also keeping up with the trends in the circle and investing in other potential projects.
All in all, the SLP protocol, as a liquidity release solution launched by Bifrost after leading the Staking derivatives track for several years, has a maturetechnical foundationand fullProduct practice, aiming to build a Polkadot ecological solutionPain Points of Staking under PoS Mechanism, to bring users a better experience, higher returns, and more complete freedom of mobility. It is a successful exploration of liquidity solutions and the best choice for users and public chains.
What is Bifrost?
Bifrost (Rainbow Bridge) is the basic protocol of Polkadot's ecological DeFi. It is committed to becoming the infrastructure for pledged assets to provide Liquidity, and launched DerivativesvToken for Staking and Polkadot Parachain Slot (Crowdloan). At present, it has received millions of dollars in financing from NGC, SNZ, DFG, CMS and other institutions and the Grant of the Web3 Foundation. It is also a member of the Substrate Builders Program and Web3 Bootcamp.
vToken can optimize Trading in multiple scenarios such as DeFi, DApp, DEX, CEX, etc., and realize the transfer channel of pledged rights and interests such as Staking and Crowdloan through vToken, realize the risk hedging of pledged assets, and expand scenarios such as when vToken is used as collateral for lending, its Staking income Part of the interest can be offset to achieve low-interest loans.
