Bifrost is a cross-chain liquid staking platform. It provides liquid staking services for various chains including those utilizing the Proof of Stake consensus. Bifrost currently supports liquid staking on 9+ chains, allowing token holders to stake their tokens to secure the network and earn while remaining liquid throughout the staking period. For tokens staked on the platform, Bifrost issues a voucher token (vToken) which stakers can trade at any time for liquidity or utilize for more yield-bearing opportunities. vKSM, vDOT, vETH, vGLMR, and vFIL are some of the vTokens issued to users by Bifrost.
Ethereum’s Transition
The Ethereum network, to enhance security and further decentralize the network, and reduce energy consumption by 99%, set out to transition the chain from its origin Proof of Work consensus to the Proof of Stake consensus. This has seen several upgrades, the Merge and the just completed Shapella (Shanghai + Capella) upgrade, which allows stakers to withdraw their staked ETH.
This transition opened the door for many liquid staking platforms which provide these services to ETH token holders.
Bifrost provided liquid staking services for ETH token holders who wanted to stake their tokens as Ethereum migrated to the PoS consensus. Token holders staked over 20,000 ETH on Bifrost, with a corresponding amount of vETH tokens minted, allowing stakers to remain liquid through the period the tokens were staked.
What is vETH?
vETH (voucher Ethereum) is the token minted to users for every ETH staked on Bifrost. vETH represents the ETH staked and accumulates the staking rewards. vETH can be traded to access liquidity instantaneously.
While the Shapella upgrade will allow users to withdraw their previously staked tokens, Bifrost recently announced an upgrade on the vETH contracts tagged as vETH 2.0. vETH 2.0 bears several advantages which top other ETH staking options. These include:
1. Faster redemption period: Bifrost aims to provide ETH stakers with more rapid redemption periods by simply matching redemption requests with new stake requests. This will result in shorter redemption times compared to those on other platforms.
2. Cross-chain utilization for various yield-bearing purposes: The power of XCM enables vETH to be used for yield-bearing opportunities or other functions on multiple supported chains on Polkadot. XCM allows a parachain on Polkadot to communicate with other parachains trustlessly. Bifrost is utilizing this technology to provide more utility for vETH outside Bifrost.
3. Delegated validator technology will provide more powerful distributed node management capabilities, single-point risk control, and automated management
4. vETH 2.0 contracts are upgradeable. This means new features can easily be added to improve the user experience.
These services put Bifrost a step ahead of other ETH liquid staking platforms. At present, stakers can put their vETH to use by adding it in a vETH-ETH LP on Balancer and staking that LP on Bifrost. With this, a staker receives standard ETH staking rewards and xBNC tokens as rewards for staking the LP on Bifrost.
It is exciting to see what more use cases the team can develop for vETH, as it is expected for the number of ETH tokens staked to increase over time.
