Executive Summary

This proposal requests operational funding for Bifrost for a two-month window, November–December 2026, together with two one-time expenditures: a one-time team transition support allocation, and a twelve-month financing charge paid once at commencement. It follows the September–October 2026 cycle (total $120,448.86), which delivered its infrastructure commitments: the multi-signature stack was replaced by a DKG-based unified signing service (production deployment completed September 24, 2026), the Hyperbridge decommissioning and user-asset remediation programme was closed out, vMANTA was fully retired, and self-operated vDOT validators went live alongside adaptation to the new DOT staking rules.

The recurring operating budget is $114,072.00 (two months at a $57,036.00 monthly cost base), a ~5% reduction against the previous cycle's monthly base. The reduction is deliberately modest. The infrastructure-migration workstream that drove the prior cycle's engineering load has closed, but this window carries a full third-party audit of the new vault contracts ahead of mainnet, budgeted inside the personnel line alongside the engineering work it gates, with the launch-time bounty extension carried in community operations. Security spend against a new risk surface is the one place this budget declines to economise.

Alongside it, this proposal requests $50,722.20 in one-time expenditures: an $18,000.00 one-time team transition support allocation, and a $32,722.20 financing charge on a twelve-month term, paid once at commencement and amortised internally across the term through November 2027. Neither is a salary component, neither recurs in the next cycle, and neither raises the monthly cost base. Total request: $164,794.20.

November–December is a launch window. Two things ship: the stablecoin / RWA liquid-staking vault moves from internal audit and formal verification through external audit to mainnet, and the new consumer-facing product line, launching under a new brand identity (name to be announced), reaches public availability. Polkadot-side operations (vDOT and vToken maintenance, validator operations, the DKG signing service, monitoring and governance) continue uninterrupted throughout.

2-Month Budget Projection

Period: November 2026 – December 2026 (2 months)

Component	Amount	Period Covered
Operating Budget (2 months × $57,036.00)	114,072.00	Nov–Dec 2026
One-Time: Team Transition Support	18,000.00	Single, non-recurring
One-Time: Financing Charge (12 Months, Prepaid)	32,722.20	12 months, prepaid
Total Request	164,794.20	–

Budget Assumptions:

• Figures in USD. This window is funded entirely in DOT and vDOT from existing treasury assets, sized to the total request.
• Monthly cost base of $57,036.00 across personnel, infrastructure, community, tooling, and talent lines. Both one-time items sit outside this base and are excluded from all monthly and recurring figures.
• The financing charge is a single payment covering a twelve-month term, not a two-month cost. It is requested here because the term begins in this window; it will not reappear in the five subsequent two-month budget cycles.
• Personnel and community carry the security work attached to this window: the external vault audit is budgeted inside personnel, and the launch-time bug-bounty extension inside community operations. Each line is tied to the function that owns the spend.
• Tooling and talent lines are held at or below the prior cycle. Server and infrastructure rises modestly for the two new product surfaces; community operations increases on the launch programme.
• Includes a modest contingency buffer across categories for flexibility.

Budget Breakdown

The budget supports Bifrost's role as a multichain Staking Yield Layer across Polkadot, Ethereum, BNB Chain, Astar, and the Pharos RWA-focused L1. This window's priorities are mainnet delivery of the stablecoin / RWA yield vault, public launch of the new consumer product line, and uninterrupted operation of the existing vToken and validator infrastructure.

Shares below are expressed against the recurring operating budget of $114,072.00.

Category	Monthly	2-Month Total	Share
Personnel Costs	38,000.00	76,000.00	66.62%
Server & Infrastructure	8,536.00	17,072.00	14.97%
Community Operations	7,000.00	14,000.00	12.27%
Talent Incentive	2,000.00	4,000.00	3.51%
Collaboration Tools	1,500.00	3,000.00	2.63%
Operating Budget Subtotal	57,036.00	114,072.00	100%

1. Personnel Costs (66.62%)

Total: $76,000.00

Core-team continuity across engineering, product, design, and operations, carrying two product lines through launch while sustaining live protocol operations. This line also carries the external security engagement attached to the vault launch. Internal audit, audit remediation, and formal verification were completed in-house; the independent work that gates mainnet release is contracted here, alongside the engineers who implement its findings.

• External Audit & Pre-Launch Verification
  • Full-scope third-party audit of the vault contracts and strategy adapters, including the Pharos RWA cross-chain strategy adapter, scoped and priced against market rates for a contract surface of this type.
  • Simulated-attack testing, testnet deployment verification, and parameter freeze review prior to production release.
  • Remediation engineering against audit findings, and re-verification of the frozen contract surface.
• Core Team Operations
  • Smart Contract Development: vault contract hardening following internal audit, formal verification, strategy-adapter implementation (including the Pharos RWA cross-chain strategy), and deployment/upgrade pipeline for mainnet.
  • Runtime Development: maintenance of the vToken and governance modules; cross-chain settlement throughput; continued support for the Ethereum-side contract surface.
  • Frontend Development: Dapp implementation and contract integration for the new product line; brand site, invitation and eligibility flows; UI work for the vault deposit and redemption journey.
  • Backend Development: vault service layer (yield-source data, accounting, redemption queue), invitation and access-code services, and the operations/CRM backend supporting launch.
  • Product Design: end-to-end user-journey work on the consumer account experience, design-system consolidation, and the vault product surface.
  • Market Operations: launch communications, content, and community programmes across both product lines.
  • Business Development: yield-source and counterparty negotiation for the vault, BNC value-capture deals, and custodian/CEX relationships. This covers internal business-development time only; the twelve-month financing arrangement is requested separately as a one-time item.
  • Developer Relations: SDK and documentation updates for SLPx multi-chain and the new vault interfaces.
  • Security Engineering: bug-bounty operations, continuous on-chain monitoring, incident-response readiness, and operation of the DKG signing service deployed in the prior cycle.
• Technical Development
  • Allocation for testing infrastructure, security tooling, and R&D against vault yield-source design and redemption mechanics.

2. Server & Infrastructure Maintenance (14.97%)

Total: $17,072.00

A modest increase against the prior cycle, covering Ethereum-side contract infrastructure and the service layer behind the two product surfaces coming online in this window. The increase is smaller than the added footprint would imply, absorbed in part by the monitoring and node consolidation completed in September–October.

• Network Operations
  • Node hosting, bandwidth, and cloud services across AWS / GCP, including capacity for Ethereum-side infrastructure and the Pharos relayer and oracle stack.
• Monitoring & Analytics
  • Prometheus, Grafana, and on-chain analytics subscriptions for real-time protocol health monitoring across all supported chains, including the alerting pipeline completed in the prior cycle.
• Development Pipeline
  • CI/CD tooling and version control to keep release cadence on track through the launch window.

3. Community Operations (12.27%)

Total: $14,000.00

Increased against the prior cycle's reduced base, concentrated on the launch window for both product lines. Spend remains weighted toward organic channels and content partnerships rather than paid acquisition. This line also carries the launch-time security bounty that extends community-facing coverage to the new contract surface.

• Community Engagement
  • Discord moderation, AMA series around the vault and new product launches, and bounty programmes for content and integration contributions.
• Security Bounty
  • Extension of existing bug-bounty coverage to the new vault contract surface at launch, funded for the first operating period and operated through the programme already running for the vToken stack.
• Marketing & Partnerships
  • Launch communications for the stablecoin / RWA vault and the new product line; continued joint awareness work with the Faroo team on Pharos LST; selective conference presence.

4. Talent Incentive (3.51%)

Total: $4,000.00

Continues team development and financial-security support at a reduced level, consistent with the leaner operating envelope. This is the recurring line only; the one-time team allocation is requested separately below and is not duplicated here.

• Team Development
  • Performance-based rewards within the operating period
• Financial Security
  • Emergency Operations Reserve
  • Market Volatility Buffer
  • Contingency Planning

5. Team Collaboration Tools (2.63%)

Total: $3,000.00

Lean tooling stack for communication, research, and development pipelines, with a modest increase for the customer-facing stack required at launch.

• Digital Workspace
  • Licenses for Slack, Notion, Gather, and Google Workspace.
• Customer Operations
  • CRM and customer-support tooling required to serve the consumer product line from day one.
• Research & Analysis
  • Premium access to Dune Analytics and DeFiLlama for market and competitor monitoring.
• Security & Engineering Tooling
  • Continuous static-analysis, dependency-scanning, and secret-scanning subscriptions in support of the audit pipeline.

One-Time Expenditures

Total: $50,722.20, outside the monthly cost base

Two items are requested once, in addition to the recurring operating budget. Neither is part of the $57,036.00 monthly base, and neither is carried forward into future cycles.

Item	Amount	Recurrence
Team Transition Support	18,000.00	Single allocation, non-recurring
Financing Charge	32,722.20	Paid once, covers 12 months
Subtotal	50,722.20	–

A. Team Transition Support

$18,000.00, one-time, non-recurring

A single one-time allocation supporting team continuity through the current operating period. It is not a salary component, does not recur in future cycles, and is not a performance award.

• Basis
  • One-time allocation approved by the Bifrost Foundation in connection with the team's transition through the current operating period.
  • Covers commitments arising from that transition; it sits outside the recurring personnel line and does not substitute for it.
• Terms
  • Paid once within this budget window.
  • Individual allocations and the positions concerned are personnel matters; they are reported to the Bifrost Foundation and available to auditors, and are not itemised in this proposal.
  • Excluded from the operating cost base used in this and future budget comparisons.

B. Financing Charge

$32,722.20, paid once, covering a twelve-month term

A single financing charge on a twelve-month facility, settled at commencement. The term runs through November 2027 and spans six two-month budget cycles. It is requested in full here because the charge is payable once at the start of the term, and it will not appear in the five subsequent budget proposals.

• Structure
  • A twelve-month financing term commencing in this window, with the charge settled in full at commencement.
  • Amortised internally at $2,726.85 per month for accounting purposes, but drawn from the treasury as a single payment.
  • Held outside the operating cost base and outside recurring comparisons, so the monthly cost base stays comparable across cycles.
• Rationale
  • The term is fixed at twelve months rather than rolling, so the cost of this funding is known at approval and does not vary across the six cycles it covers.
  • Settling once at commencement is the condition of the rate applied; a monthly structure over the same period would cost more.
• Terms
  • Paid once at commencement; no further charge accrues for the duration of the term.
  • Counterparty identity and detailed commercial terms are subject to confidentiality and are available to the Bifrost Foundation and auditors on request.

Expected Outcomes

Technical Achievement

Stablecoin / RWA yield vault live on mainnet. The vault contracts have completed internal audit and audit remediation and are now in internal testing ahead of release under the new brand. Formal verification and the deployment/upgrade pipeline are in progress. This window carries the product through full external audit, testnet verification, and a phased mainnet release, with the Pharos RWA cross-chain strategy adapter as the first external yield integration.

New consumer product line publicly available. The Dapp, brand site, invitation system, and operations backend reach public availability within this window, under a new brand identity to be announced separately.

Pharos LST live and expanding. stPROS launched on mainnet in October 2026 following a joint audit by Bifrost, Faroo, Pharos and ABDK. As of November 6, 2026, approximately 4M PROS have been minted across 103 holders, representing roughly $2.2M in TVL, and growth is continuing. tbPROS is scheduled to launch at the end of November, executed by the Faroo team with Bifrost providing infrastructure and integration support via SLPx.

Existing infrastructure operating without regression. vToken issuance and redemption, self-operated vDOT validators, the DKG signing service, and the monitoring and alerting pipeline all continue under the security audit and bug-bounty cadence established in prior cycles.

Market Expansion

This window moves Bifrost from a liquid-staking protocol serving on-chain users to a yield layer with a direct consumer surface. The stablecoin / RWA vault extends the yield engine beyond consensus-layer staking into tokenised real-world asset returns, and the new product line puts that engine in front of end users rather than exclusively in front of integrators. The existing vToken business (vDOT, vETH, and the Polkadot-native staking surface) remains the protocol's revenue base and continues to be the first yield source available inside the new products.

Financial Growth

• Diversified revenue streams (LST staking fees from existing vTokens; vault management and performance fees; Pharos LST staking fees; cross-chain transaction fees)
• Improved operational cost ratio, with the monthly cost base reduced ~5% against the prior cycle while funding a full external audit and two product launches
• Continued progress on the BNC tokenomics upgrade per the published 2026 roadmap

Risk Management Framework

Financial Risk

• Mitigation through diversified treasury holdings and hedging strategies against crypto volatility.
• Monthly stress testing of budgets against market scenarios.
• Treasury drawdown valuation risk: the entire basket is denominated in DOT and vDOT, which are subject to market and exchange-rate movement between proposal approval and disbursement; any shortfall against the total request from adverse price movement is covered by Bifrost Foundation reserves.
• The basket is denominated entirely in protocol-native assets, carrying no stablecoin counterparty exposure.
• The one-time team allocation is drawn once within its window and is excluded from all recurring cost comparisons.
• Prepayment of the financing charge: settling the full charge at commencement fixes the cost of the funding for the term and removes rate exposure across the six cycles it covers. Counterparty exposure is bounded by the fixed term, with commercial terms held with the Bifrost Foundation and available to auditors.

Technical Risk

• Vault launch protected by staged gating: internal audit → formal verification → external audit → testnet verification → phased mainnet release. Production parameters and interfaces are frozen before external audit begins, and mainnet release is gated on audit completion.
• New risk surface explicitly budgeted: pooled stablecoin deposits against external yield sources carry counterparty and liquidity risk distinct from liquid staking. Yield-source selection is subject to counterparty review, and redemption mechanics are designed against term-mismatch exposure.
• Cross-chain security: ongoing monitoring of SLPx message security and settlement correctness.
• All disbursements gated by the DKG-based signing service deployed in the prior cycle; backup systems for validators and code repositories, with penetration testing integrated into the 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 (VPNs, cloud backups).
• Launch concentration risk: two product launches fall inside a single two-month window. Sequencing is staged rather than simultaneous, and the vault mainnet release is gated independently of the consumer product launch so that a delay in one does not force a compromise in the other.
• Pharos / Faroo dependency risk: contingency timeline preserves Bifrost's standalone roadmap if partner timelines slip.

Proposal Execution

Proposed Supplementary Funding

This request is funded through a treasury asset drawdown denominated entirely in DOT and vDOT (no stablecoin component), sized to match the total request of $164,794.20 exactly, valued as of the November 6, 2026 snapshot (DOT at $0.926; vDOT at an exchange rate of 1.669064 DOT per vDOT, giving $1.5456 per vDOT). The basket is set so that its combined value equals the request precisely.

Asset	Amount	USD Value
vDOT	36,514.34	56,434.86
DOT	117,018.73	108,359.34
Total	–	164,794.20

Execution Details

• Treasury drawdown: 36,514.34 vDOT + 117,018.73 DOT = $164,794.20 at snapshot prices, matching the total request exactly.
  • Withdraw 88,002.6657452 BLP0 for 38,245.0158 DOT and 29,816.2497 vDOT, for a total worth of 88,023.6869 DOT
• Allocation of the drawdown: $114,072.00 to the two-month operating budget, $18,000.00 to the one-time team transition support allocation, and $32,722.20 to the twelve-month financing charge.
• Beneficiary (Bifrost Foundation): 133VgJJgp1s9wxLqgCFxYx6T873hZQNchJM9tmbU6NkYaaqW
• Operating-budget assets are converted on a monthly schedule against actual spend rather than in a single transaction, limiting market impact and exchange-rate exposure. The financing charge is settled at commencement of its term. The team allocation portion is drawn once within the window.
• Final asset valuations are subject to market prices at the time of disbursement; any shortfall against the total request from adverse price movement is covered by Bifrost Foundation reserves.

This budget proposal aims to support Bifrost's continued growth across the Polkadot, Ethereum, and Pharos ecosystems while maintaining operational efficiency and community trust. Final figures may be adjusted based on community feedback and end-of-period market conditions.