Executive Summary

This proposal requests operational funding for Bifrost from March 2026 to May 2026. Due to recent volatility in cryptocurrency market prices, we have adjusted the application cycle from every six months to every three months. The budget covers personnel costs, server maintenance, collaboration tools, marketing operations, and sustainable development funds. It aims to maintain Bifrost's leading position as a Yield Layer while expanding market reach on a larger scale, increasing protocol adoption and revenue.

3-Month Budget Projection

Period: March 2026 - May 2026 (3 months)

Total Operating Budget: $285,201.69

Budget Assumptions:

• Figures in USD, converted from stablecoin reserves monthly to hedge volatility.
• Includes a modest contingency buffer across categories for flexibility.
• Based on recent performance, including TVL around $80-86M (per DefiLlama and protocol reports as of early 2026) and ongoing growth in vDOT/vETH usage.

Budget Breakdown

The budget supports Bifrost's current scale as a parachain with broad DeFi integrations and liquid staking derivatives across multiple chains.

1. Development & Technical Infrastructure (72.21%)

Total: $205,952.16

This category supports core engineering and product efforts to enhance Bifrost's staking liquidity protocol, ensuring scalability and integration with Polkadot and other ecosystems.

• Core Team Operations
  • Runtime Development: Focus on optimizing parachain runtime for improved transaction efficiency and cross-chain compatibility.
  • Smart Contract Development: Auditing and upgrading contracts for vToken minting and redemption processes.
  • Frontend Development: Enhancing user interfaces for the Bifrost app and dashboard.
  • Product Design: Iterating on UX/UI for new features like yield farming integrations.
  • Market Operations: Coordinating promotional campaigns and content creation.
  • Business Development: Pursuing partnerships with DeFi protocols and exchanges.
  • Developer Relations: Hosting workshops and providing SDK support for third-party integrations.
• Technical Development
  • Allocation for tools, testing environments, and R&D to advance features such as multi-chain yield aggregation.

2. Infrastructure Maintenance (9.76%)

Total: $27,846.97

This ensures reliable network performance and security for Bifrost's infrastructure.

• Network Operations
  • Covering node hosting, bandwidth, and cloud services on providers like AWS or Google Cloud for parachain validators.
• Monitoring & Analytics
  • Subscriptions to tools like Prometheus, Grafana, and blockchain analytics platforms for real-time monitoring of protocol health.
• Development Pipeline
  • CI/CD tools and version control systems to streamline deployments and bug fixes.

3. Team Collaboration Tools (1.13%)

Total: $3,222.21

This supports efficient remote work and knowledge sharing among the distributed team.

• Digital Workspace
  • Licenses for Slack, Notion, and Gather for communication and project management.
• Research & Analysis
  • Access to premium data sources like Messari or Dune Analytics for market insights.

4. Marketing and Community Operations (7.87%)

Total: $22,436.34

This drives user growth and engagement within the Bifrost ecosystem.

• Community Engagement
  • Funding for Discord moderation, AMAs, and bounty programs to reward contributors.
• Marketing & Partnerships
  • Social media ads, influencer collaborations, and event sponsorships to boost TVL and user acquisition.

5. Sustainable Development Fund (9.03%)

Total: $25,744.02

This reserve promotes long-term team health and project resilience.

• Team Development
  • Performance-based Rewards
  • Professional Development
  • Team Building Activities
  • Training Programs
• Financial Security
  • Emergency Operations Reserve
  • Market Volatility Buffer
  • Contingency Planning
  • Strategic Investment Pool

Expected Outcomes

Technical Achievement

Brings enhanced security and reliability, providing stronger protection and greater system stability. Transaction processing efficiency has been significantly improved for faster and smoother operations. Network latency and costs are substantially reduced, delivering a more responsive and cost-effective experience. Additionally, expanded cross-chain compatibility enables seamless interoperability across diverse blockchain ecosystems, unlocking broader use cases and connectivity

Market Expansion

Bifrost's Market Expansion strategy focuses on deepening integration within the RWA ecosystem. Bifrost will collaborate with Pharos, a high-performance RWA-focused Layer 1 blockchain, and Faroo, its native liquid staking protocol powered by Bifrost's SLPx architecture. This partnership aims to drive the adoption of LSTs (Liquid Staking Tokens) in RWA applications on Pharos.

By leveraging Faroo's infrastructure, Bifrost enables LSTs to be utilized within RWA scenarios while combining RWA yields (from tokenized real-world assets) with LST staking rewards. This hybrid yield mechanism offers users more flexible and optimized earning strategies, blending stable RWA returns with dynamic staking income, enhancing capital efficiency and composability in the evolving RWA-DeFi landscape

Financial Growth

• Sustainable TVL growth
• Diversified revenue streams
• Optimized operational costs
• Enhanced BNC utility
• Upgrade BNC tokenomics

Key Performance Indicators (KPIs)

Technical Metrics

1. Network uptime and reliability
2. Transaction processing speed
3. Smart contract security score
4. Cross-chain transaction volume

Business Metrics

1. Monthly TVL growth rate
2. Protocol revenue trends
3. New ecosystem integrations
4. User acquisition and retention
5. Community engagement levels

Budget Management

Review Process

Quarterly reports submitted to the Bifrost DAO via Subsquare, including detailed breakdowns and variance analysis for full transparency, as practiced in our 2025-2026 proposals.

Adjustment Mechanisms

• Flexible reallocations up to 10% between categories, based on performance data (e.g., shifting from marketing to development if TVL targets are met early).
• Approvals via on-chain governance votes, ensuring community input and alignment with Bifrost’s OpenGov principles.

Risk Management Framework

Financial Risk

• Mitigation through diversified treasury holdings and hedging strategies against crypto volatility.
• Monthly stress testing of budgets against market scenarios, with reserve for price drops.

Technical Risk

• Regular third-party security audits and multi-signature wallets for all fund disbursements.
• Backup systems for validators and code repositories to ensure continuity, with penetration testing integrated into our CI/CD pipeline.

Operational Risk

• Backup plans for key personnel, including cross-training across roles and documented succession protocols.
• Remote work policies with redundancy tools (e.g., VPNs and cloud backups) to handle global disruptions, proven effective during 2025's ecosystem events.

Proposal Execution

Proposed Supplementary Funding

The supplement will be provided in vETH and vDOT, valued using 7-day average prices and applicable vToken exchange rates:

Token	7-Day Avg Price (USD)	vToken Rate	vToken Amount	USD Value
ETH	2033.56	1.142183	77.1533	179,203.79
DOT	1.31	1.618290	50,000	105,998
Total	-	-	-	285,201.79

Execution Details

• Request:
  • 77.1533 vETH
  • 50,000 vDOT
• Total Value: Approximately 285,201.79 USD
• Beneficiary (Bifrost Foundation): 133VgJJgp1s9wxLqgCFxYx6T873hZQNchJM9tmbU6NkYaaqW

This budget proposal aims to support Bifrost's growth while maintaining operational efficiency and community trust. All figures can be adjusted based on community feedback and changing market conditions.