Summary

Currently, all Bifrost LSTs except vDOT have a commission rate of 10%. This proposal suggests adjusting the vDOT commission rate to 10% in preparation for the launch of Bifrost Tokenomics 2.0.

Why is this a positive impact for existing vDOT holders?

• Raising the vDOT commission rate will encourage vDOT's adoption in more applications (through partnerships formed via the Reward-Share Program (RSP)), grow the user base, and boost Bifrost protocol revenue.
• Bifrost Tokenomics 2.0 will offer enhanced benefits to users holding both bbBNC and vDOT. As more new users join, a larger share of protocol revenue will be directed towards these dual token holders.

Motivation

Based on the current token price, Bifrost's annual protocol revenue is approximately $1,511,323, which includes about $340,000 from vDOT commission. If we adjust the vDOT commission to 10%, the target profit from vDOT would increase to $680,000, boosting the total protocol revenue by 22.5%.

Increasing vDOT revenue is crucial for Bifrost's long-term development, primarily reflected in the following aspects:

Motivate bbBNC Holder

Under our proposed Bifrost Tokenomics 2.0, most protocol revenue would incentivize bbBNC holders. This increased incentive would motivate bbBNC holders to mint more vTokens, driving up total protocol revenue. The result?

A positive flywheel effect that benefits the entire ecosystem.

Expand Reward-Share Program (RSP)

RSP’s goal is to share a portion of its vToken reward with these partners to foster long-term strategic cooperation and stimulate the continuous growth and adoption of Bifrost’s services.

As vDOT is the largest LST asset in Bifrost's TVL, it needs more partners to create diverse use cases and expand its user base. Increasing vDOT's commission is therefore crucial for attracting partners to the RSP. With the potential to earn higher income than validator commissions, application teams like wallets and infrastructure providers are more likely to integrate vDOT and form long-term strategic partnerships with Bifrost.