Introducing BuyBack BNC: Transforming Protocol Revenue into Sustainable Value for Participants

In the rapidly evolving landscape of DeFi and blockchain governance, protocols are continually seeking innovative ways to create lasting value for their communities. Bifrost, a pioneering project in the Polkadot ecosystem renowned for its Liquid Staking capabilities, is taking a significant step forward with the launch of its BuyBack BNC (bbBNC) initiative. This new tokenomics model aims to turn protocol-generated revenue into tangible, long-term benefits for token holders and participants alike.

The Evolution of Bifrost and the Need for Value Capture

For years, Bifrost’s native token, $BNC, has played a vital role in governance, paying transaction fees, funding treasury activities, and providing slashing insurance. However, despite its utility, $BNC lacked a mechanism to directly generate or capture value for its holders beyond voting rights. This limitation became increasingly apparent in the post-2021 DeFi summer era, where tokens without tangible yield or revenue-sharing mechanisms faced declining long-term appeal.

Recognizing this challenge, the industry has shifted towards models that integrate revenue-sharing and buyback strategies, creating a sustainable flywheel of value creation. Bifrost’s latest upgrade embodies this evolution through the introduction of BuyBack BNC.

The Core Principles of BuyBack BNC

The fundamental idea behind bbBNC is straightforward yet powerful: utilize a portion of the protocol’s revenue to buy back and burn tokens, thereby rewarding participants and reducing supply. Specifically, 100% of Bifrost’s on-chain profit will be allocated as follows:

• 90% will be redistributed to bbBNC holders, effectively sharing protocol growth with the community.
• 10% will be permanently burned, reducing total supply and potentially increasing token scarcity and value.

This approach aligns the interests of token holders with the protocol’s growth, turning revenue into long-term, sustainable value.

Revenue Streams Fueling the BuyBack

Bifrost generates sustainable on-chain revenue from multiple sources, including:

• vToken staking commissions
• System staking yields
• Transaction fees
• vToken swap fees
• Expanded application revenue
• Early redemption slashes for bbBNC

By diversifying revenue streams, Bifrost ensures a steady flow of income that can be effectively redistributed to its community.

How Participation Works: Locking vBNC to Mint bbBNC

Participation in the bbBNC system involves locking vBNC, Bifrost’s LST native token. When users lock their vBNC, they receive bbBNC—an escrow token representing their share of the protocol’s profit cycle.

The amount of bbBNC minted depends on:

• The quantity of vBNC locked
• The duration of the lock-up period

Longer lock-up periods result in higher bbBNC value, incentivizing commitment and stability within the ecosystem.

Participation Flow and User Interface

While the detailed mechanics of how users can lock, claim, or exit their bbBNC holdings are forthcoming, the upcoming release promises a transparent and user-friendly interface. This will enable participants to seamlessly engage with the protocol, ensuring that the benefits of revenue-sharing are accessible and straightforward.

BuyBack BNC represents a strategic shift for Bifrost—moving from a utility token with limited value capture to a revenue-sharing asset that aligns the interests of the protocol and its community. By leveraging protocol revenues for buybacks and burns, Bifrost aims to foster a more sustainable, rewarding ecosystem for all participants.

Stay tuned for the next update, where we will unveil the full participation flow and interface details, empowering users to actively benefit from Bifrost’s growth and success.