BNC

The BNC token is native to Bifrost, fueling its network operations and governance mechanisms. Initially, `BNC` was primarily used for governance participation and transaction fees. With the upcoming Tokenomics 2.0, Bifrost is transitioning to a **fee switch** model. This new approach directs 100% of protocol profits to buy back `BNC`, with 90% redistributed to **bbBNC** holders and 10% burned. Users acquire **bbBNC** by liquid staking **BNC** to mint **vBNC** and then locking **vBNC**. This incentivizes long-term holding, reduces circulating supply, and aligns user participation with the protocol's sustainable yield optimization and growth in the liquid staking landscape.

Bifrost introduces vTokens as liquid representations of staked assets that automatically accrue rewards without lockup periods. Unlike traditional staking where assets become illiquid, vTokens maintain tradeability in DeFi markets while earning staking yields. The protocol's cross-chain design enables staking across multiple networks from a single interface, and its validator optimization algorithms enhance yield efficiency by 5-15% compared to direct staking.

Bifrost employs a multi-layered security framework: 1) Non-custodial architecture where user assets never leave sovereign-controlled accounts; 2) Real-time slashing insurance funded by 5% of protocol fees; 3) Decentralized oracles with 4/5 multisig validation for critical operations; 4) Regular audits by firms including CertiK and OAK Security; 5) Governance-restricted critical functions requiring OpenGov approval. This framework has secured over $137M in derivatives without incidents since mainnet launch.

Yes, vTokens retain the governance rights of their underlying assets through Bifrost's cross-chain voting infrastructure. vDOT holders can participate in Polkadot OpenGov referenda, while vKSM holders vote in Kusama governance. This is enabled by XCM message passing that delegates voting power to vToken holders without requiring asset unstaking. Governance participation preserves capital efficiency while maintaining network influence.

Revenue originates from three streams: 1) 0.5-3% fee on vToken staking yields; 2) AMM swap fees (0.01-0.3%) in StableSwap pools; 3) Liquidation penalties in lending integrations. The BNC 2.0 model directs 30-50% of this revenue to buyback-and-distribute mechanisms for vBNC holders. Additional sustainability comes from protocol-owned liquidity in vToken pairs, creating compounding value accrual.

Bifrost provides four key advantages: 1) Omnichain operation eliminating bridge risks through XCM; 2) Preserved governance rights in native chains; 3) Higher yields via validator-set optimization; 4) Cross-chain composability enabling vToken use across DeFi ecosystems. Unlike single-chain solutions, Bifrost's architecture supports 9+ blockchains with unified liquidity, reducing fragmentation. The protocol also avoids centralized points of failure through decentralized oracle networks.