Background
vFIL was Bifrost’s bold attempt to establish itself in the heterogeneous chain LST sector during the launch of Filecoin’s FEVM. In its prime, vFIL achieved a TVM peak of nearly 100,000 FIL, offering decentralized and secure FIL LST services to Filecoin users. However, several issues have surfaced during its operation, including:
- Subpar cross-chain experience: The multi-signature bridge’s security audit mechanism led to a slow and cumbersome user experience.
- Lack of on-chain applications: Limited scenarios to efficiently utilize vFIL.
- Insufficient synergy with FEVM: vFIL failed to deeply integrate with FEVM, resulting in minimal ecosystem collaboration.
- Decentralization challenges: Inadequate support for decentralized storage providers (SPs) in its operation mechanism.
- Inefficient redemption mechanism: Long and uncertain redemption cycles.
- Insufficient market liquidity: Prolonged low secondary market prices and low trading activity.
- …
Due to these issues, vFIL’s TVM has stagnated over the past year, with a significant number of users opting for redemption. Given that the current vFIL mechanism design and supporting infrastructure fail to meet user and SP needs—and fall short of Bifrost’s service standards for LST products—it is proposed that the current version of the vFIL service be phased out in an orderly manner.
Decommissioning Plan
Phase 1 (Q4 2024)
- Halt FIL deposits into Bifrost (already stopped).
- Stop vFIL minting functionality (planned execution via governance on December 31, 2024).
Phase 2 (Q1 2025)
- Await the gradual expiration of FIL sealed by Filecoin storage providers (SPs).
- After expiration, transfer unlocked FIL to Bifrost’s vFIL Ready Pool.
Estimated expiration dates:
- f079426: October 24, 2024 (already expired)
- f02182258: November 3, 2024 (already expired)
- f0111584: February 1, 2025
Phase 3 (Q1 2025 – June 30, 2025)
- Decommission on-chain modules related to vFIL asset custody.
- Enable users to redeem vFIL at any time and directly receive FIL via fast redemption.
- Allow users to transfer FIL back to the Filecoin network via the cross-chain bridge.
Phase 4 (June 30, 2025)
- Disable Bifrost’s cross-chain bridge for FIL transfers back to the Filecoin network.
- After bridge closure, vFIL can still be redeemed, but FIL cannot be immediately transferred back to the Filecoin network.
Phase 5 (Post-June 30, 2025)
- Decommission chain modules related to FIL cross-chain transfers.
- Users can still request FIL transfers back to the Filecoin network through governance proposals, though the process may take several months.
Key Notes for Users
- Timely actions: Users are advised to complete vFIL redemptions and FIL transfers back to the Filecoin network during Phase 3 to avoid complications after the cross-chain service ceases.
- Asset distribution: Ensure proper management of your vFIL assets in farming pools, LP pools, and those transferred to Moonbeam.
- Governance fallback: Post-Phase 4, users can still utilize governance proposals to transfer FIL back to the Filecoin network, but this process may be significantly longer (several months).
Future Plans
The discontinuation of the current vFIL service does not imply abandoning the development of FIL LST and related businesses. Instead, this represents a reevaluation and optimization of the existing mechanisms and service models.
In the future, Bifrost may relaunch the FIL LST business under more favorable conditions, leveraging the lessons learned to deliver:
- Improved user experiences.
- Safer implementation strategies.
- Greater ecosystem collaboration and value creation.
Any remaining vFIL and FIL assets on-chain can be seamlessly integrated into future services, continuing to generate value for the community and users.