🚀 Bifrost Tokenomics 2.0: Towards Sustainable Real Yield in DeFi

In Web3, effective tokenomics design is a key factor in aligning the interests between protocols and users, while also driving long-term growth. While many DeFi projects still rely on the "governance token" model, the trend is gradually shifting towards sharing real yield (real yield) – and Bifrost is one of the pioneers in this direction within the Polkadot ecosystem.

⚠️ Issues With Simple Governance Model

In the early stages of DeFi, tokens like $UNI only provided voting rights but did not reward loyal users. This made the value of the token susceptible to erosion and made it difficult for holders to retain them in the long term.

Some protocols like Curve or GMX have pioneered this change: linking protocol revenue with real rewards for holders through models such as buyback and fee-sharing. This has created a growth flywheel (flywheel): more users → increased revenue → increased token value → attracting more users.

🌐 Bifrost And The Leading Position of LST

Bifrost currently occupies over 68% market share of Liquid Staking Token (LST) on Polkadot. The protocol allows users to stake DOT, KSM, BNC… and receive vToken to continue using in DeFi.
With Tokenomics 2.0, Bifrost shifts from a governance model to a token buyback model and revenue sharing.

🔁 How Does Tokenomics 2.0 Work?

All profits from the operation of the protocol will be used to buy back BNC tokens:
🔸 90% distributed to bbBNC holders
🔥 10% burned to reduce supply

This mechanism creates a value circle:
Mint vToken → Generate revenue → Buy back BNC → Reward bbBNC → Attract more users → Increase mint vToken

🧩 What is bbBNC?
To participate in the profit-sharing model, users need to:

🔐 Stake BNC → receive vBNC
⏳ Lock vBNC → receive bbBNC
💸 Hold bbBNC → receive revenue sharing

⚠️ bbBNC cannot be transferred and can only be redeemed after the lock-up period. Early withdrawal will incur penalties, helping to maintain the stability of TVL and limit token inflation.

📈 Why Is It Important?

The profit-sharing model is only effective if the protocol has real revenue. Bifrost currently has stable cash flow from the LST ecosystem. With Tokenomics 2.0, the BNC token is tied to real value, rather than just being a governance tool.

✅ Conclusion

Tokenomics 2.0 is Bifrost's strategic advancement – transforming BNC from a governance token into a sustainable income-generating asset.

While many DeFi projects still rely on short-term inflation mechanisms, Bifrost takes a different approach: slow but steady, focusing on long-term growth, real benefits, and community engagement.