How to enhance liquidity: in a conversation with a cross-chain network
Launched in 2019, Bifrost has been focusing on developing a parachain for liquidity’s staking. Tyrone Pan, Bifrost product manager, talked to Cointelegraph about liquidity release solutions and why they are important for efficient and secure staking.
Nowadays, the proof-of-concept (PoC) consensus mechanism is dominating the blockchain world. Most proof-of-stake (PoS) public chains require validators or full nodes in the network to stake part of the token, ensuring that the blockchain can operate safely.
According to the Staking Rewards data, the average staking rate of PoS blockchains is above 55%, and DeFi protocols have over 30% staking rate.
Therefore, the liquidity problem during the staking period needs to be solved urgently, which will significantly increase the fund utilization rate of the entire network. Anc Bifrost was founded in 2019, aiming to solve this problem.
Bifrost hopes to release liquidity for staking assets in the form of derivatives and open up cross-chain channels between heterogeneous chains to provide sufficient liquidity for the vision of Web 3.0's multi-chain interoperability.
Bifrost has two liquidity release solutions:
1. Staking Liquidity Protocol (SLP)
Bifrost is a completely decentralized network, issuing staking derivatives with standardizing the interest generation, settlement and equity retention of staking assets, which can provide liquidity for all kinds of staking assets.
However, due to the decentralized characteristics, the collateral also needs to have the following characteristics, including assets released, reward settled and equity proved on-chain.
vETH is the initial staking derivative product of Bifrost, which has accumulated an underlying 18,000 ETH at the moment.
2. Slot Auction
Read more on cointelegraph.com
