[Proposal: 24] Register Bifrost Liquid Staking Tokens (LSTs) xcvKSM, xcvMOVR, xcvBNC on Moonriver

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Register Bifrost Liquid Staking Tokens (LSTs) xcvKSM, xcvMOVR and xcvBNC on Moonriver

Authors: Tyrone, Thibault

Summary

This proposal aims to add Bifrost vKSM (liquid staking KSM), vMOVR (liquid staking MOVR) and vBNC (liquid staking BNC) on Moonriver, prepare for two use cases:

  1. Pushing the integration of xcvKSM& xcvMOVR and xcvBNC XCM stake/unstake SDK (Bifrost XCM-action SDK) on Moonriver, it is convenient for users to directly mint Substrate Native LSTs in Moonriver EVM applications.
  2. Bifrost will deploy the Omni LSD Dapp on Moonriver for easy user interaction.
  3. Deploy xcvKSM and xcvMOVR liquidity on Moonriver DEXs.

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Test on Moonbase

xcvKSM cross-in Moonbase:

xcvKSM cross-out Moonbase:

xcvKSM cross-in Moonbase:

xcvKSM cross-out Moonbase:

Protocol Description

Bifrost (https://bifrost.finance) is a substrate based Kusama and Polkadot parachain that provides non custodial decentralised cross-chain liquid tokens for staked assets. By leveraging on Polkadots cross-consensus message format (XCM) it provides standardised cross-chain liquid staking services for various networks notably Polkadot (vKSM), Kusama (vKSM) and the first LST solutions on both Moonriver (vMOVR), Moonriver (vMOVR) as well as other multiple chains (currently 6+ chains).

Bifrost is currently one of the largest liquid staking protocols on Polkadot with a current total TVL of $38M. vKSM, Bifrost liquid LST for staked KSM was launched in Nov of 2021, and there is already around $7.71M TVL of DOT staked with Bifrost. vMOVR, the first parachain-liquid staking derivative in Kusama ecosystem launched in late Nov of 2022, which has accumulated over 226K MOVR staked with Bifrost.

Learn more details about the mechanism behind vKSM and vMOVR.

Recently, Bifrost had implemented XCM V3, improved the underlying logic of vTokens (SLP Pallet). Learn more details here.

Bifrost App: https://bifrost.app/

Check Bifrost LST statistics at here.

Motivation

Benefits for Moonriver ecosystem

  • Protocol Owned Liquidity (POL) : Provide more liquidity for staked KSM and MOVR, promote the capital utilization of KSM and MOVR in various DeFi scenarios and applications leveraging Kusama’s XCM.
  • Drive the enthusiasm and interest of more KSM and MOVR holders to participate in staking and benefit from the capital efficiency and liquidity benefits of holding vKSM and vMOVR vs. native staking.
  • Support the growth of the protocols building natively in Moonriver and Polkadot by integrating xcvKSM and xcvMOVR and driving utility and usecases within their ecosystems.

What are the differences between Bifrost LSTs “vTokens” and Lido?

The Bifrost parachain pallet natively executes Substrate runtime logics to stake and mint LSTs, thus Bifrost vTokens are easily crossed to other parachains via XCM, these Substrate LSTs’ are supported by Polkadot parachain consensus thus ensuring security.

As vTokens can be crossed chain via XCM, Bifrost is finalising a vToken XCM mintable Pallet which is called the “XCM-action Pallet”. It services other parachains to call this pallet via XCM and mint vTokens, this Pallet then will automatically send vTokens back via XCM to the destination chain’s caller address (the caller address is LST user). Therefore, Bifrost will deploy an XCM-action contract and UI on Moonriver, to be directly interacted by any Moonriver applications to support vToken mint & redeem on Moonriver.

In addition, we are trying to test if this pallet could facilitate cross-chain liquidation for vKSM/DOT and vKSMs use cases in various DeFi protocols (i.e. Lending/Borrowing) on Substrate and EVM parachains.

Read detailed logic about how XCM-action works (we are currently co-testing with Astar): Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

vToken Fast-Redeem

While Moonriver’s original chain Staking has a fixed 24 rounds (about 48 hours) revoking period, Bifrost SLP helps users to realize the possibility of early vMOVR redemption by matching the real-time MOVR staked order unstaked order, and form a fast-redeem queue.

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In the capture above, the green line shows there are no other unstaked orders above me, which means if there is any new GLMR stake with Bifrost, my unstaking order will be fulfilled in the first place.

Links & References

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I have already shared my thoughts and questions under the Bifrost proposal for Moonbeam, and I find that they also apply to the proposal for Moonriver. therefore, I have decided to share a link to my comment here, just in case someone may have missed it:

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I just want to say that for Moonriver, the revoke period is 24 rounds (which is approximately 48 hours, depending on block time)

it seems there is a typo here and it should be MOVR

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Very much appreciate sir!

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Hey @turrizt,

appreciated to your suggestions, we totally agree with you to declare the risks of vTokens in multiple aspects. Staking Liquidity Pallet (SLP) is the core module to execute all transactions for underlying staking via the XCM and generate liquid staking Token (vToken) to users. Thus, a SLP vToken security instruction might help to understand the vToken reserve risk and protocol security. Please check all the details at: Staking Liquidity Protocol (SLP) vtoken security.pdf - Google Drive

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this proposal is up to vote
https://moonriver.polkassembly.io/referenda/24

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CertHum has voted Aye in the Referendum. In the hope that this helps to grow the adoption of vMOVR, we hope Bifrost uses care when revoking from collators receiving Bifrost delegations so as not to disrupt the active set

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Im vote aye on this, the people most surely will want to be able to use their liquidataking on moonriver and create more use of it

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I also voted in support of this proposal.