Everything You Need to Know About bbBNC

bbBNC is a key component of Bifrost’s Tokenomics 2.0, designed to align protocol revenue, staking rewards, and governance rights with BNC holders. Understanding bbBNC is essential for anyone interested in participating actively in the Bifrost ecosystem. Here’s what you need to know:

1. What is bbBNC?

bbBNC is an escrow token that users obtain by first liquid staking BNC to get vBNC, and then locking the vBNC for a certain period. The amount of bbBNC you receive depends on both the quantity of BNC/vBNC locked and the duration of the lock-up. This mechanism incentivizes long-term commitment and active participation.

2. Why is the bbBNC Mechanism Designed This Way?

Unlike simple airdrops, bbBNC’s design rewards users who commit their tokens for longer periods, encouraging sustainable growth rather than short-term speculation. The lock-up period reduces immediate selling pressure, helping to stabilize and potentially increase the token’s value.

3. How Long Can You Lock Your Tokens?

Users can lock their BNC or vBNC for up to 4 years. The longer you lock, the more bbBNC you receive and the higher your share of rewards and governance power.

4. What Are the Benefits of Holding bbBNC?

• Profit Distribution: bbBNC holders earn rewards from various protocol revenue streams such as transaction fees, swap fees, SST income, and commissions. These rewards are distributed monthly.

• Governance Rights: Holding bbBNC grants voting power in protocol governance, giving users a say in the future direction of Bifrost.

• Boosted Farming Incentives: bbBNC can enhance farming rewards, providing additional incentives for holders.

5. What Happens if You Unlock Early?

Early redemption of locked tokens incurs a fee calculated by a quadratic formula based on the remaining lock time. Fees collected from early unlocks are redistributed to bbBNC holders, creating a fair penalty system that discourages premature withdrawals.

6. Is bbBNC Transferable?

No. bbBNC is non-transferable by design to securely record locked BNC addresses. The team is working on solutions for special cases such as wallet changes or compromised accounts.

7. How Does bbBNC Affect Liquidity?

Currently, only the vBNC-vDOT liquidity pool supports bbBNC boosting. The introduction of bbBNC is not expected to significantly impact BNC liquidity on decentralized or centralized exchanges.

8. Does bbBNC Include a Burning Mechanism?

Yes. Part of the protocol’s profits is used to burn BNC tokens, creating a deflationary effect that may increase the token’s value over time.

9. How Do Collators Benefit?

Since bbBNC is generated from vBNC, which involves staking BNC with Collators, Collators indirectly benefit from the bbBNC ecosystem through increased staking activity.

Final Notes

The bbBNC proposal is still under discussion and evolving. The Bifrost team is actively exploring improvements, including solutions for token management issues and increasing transparency around protocol profits.

If you want to dive deeper into the details, check out the full bbBNC FAQ, which covers lock mechanics, rewards, governance, and more.