Deep Dive into Biquid

What is Liquid Staking?

Liquid staking is a breakthrough that overcomes the lock-up issue of traditional staking. In traditional staking, the staked cryptocurrency is locked up on the network for a period of time and cannot be freely used, although some rewards are received periodically. Liquid staking solves this problem by giving users who stake liquid staking derivatives(LSD), which are tokens that represent their staked assets. Users can then freely utilize these tokens on other DeFi platforms while still receiving the staking rewards, allowing them to get the benefits of staking and liquidity at the same time.

Staked cryptocurrency is delegated to Validators, helping to strengthen the security of the network. Validators use this cryptocurrency to create new blocks and validate transactions, and are compensated with cryptocurrency in return. The rewards are distributed between validators and stakers. Typically, validators take a portion of the reward as a fee, and the rest is distributed to stakers in proportion to the amount of cryptocurrency they've staked.

Learn More About Biquid

Bifrost Liquid Staking (Biquid) is a solution that allows you to monetize by staking BFC and utilizing your staked BFC in various DeFi. When you stake BFC, you will receive stBFC or wstBFC, which can be exchanged back to BFC whenever you want, and can be used for additional profit. The staked BFC is then delegated to validators and used to increase the security of the Bifrost network. Finally, if a user requests to unstake, they will become withdrawable after the unstaking period, and their BFC will be withdrawn when they request a withdrawal.

Staking Cryptocurrency: BFC

Biquid offers users a way to stake BFC. BFC is the native coin of the Bifrost network and is utilized for various purposes related to the operation of the network. BFC can be easily purchased on the exchanges listed below.

• Upbit(BFC/BTC)

• Bithumb(BFC/KRW)

• KuCoin(BFC/USDT)

• Gate.io (BFC/USDT, BFC/ETH)

• HTX(BFC/USDT)

• Cryptology(BFC/USDT)

• Korbit(BFC/KRW)

Liquidity Staking Derivatives: stBFC & wstBFC

Once you complete staking, you will receive either stBFC or wstBFC. The holder of the (w)stBFC is considered a participant in the staking, and will receive periodic staking rewards accordingly. This means that even if you utilize your (w)stBFC on another DeFi platform, you will continue to receive staking rewards as long as you retain ownership. However, if you swap your (w)stBFC for another cryptocurrency or use it to unstake, you will lose ownership and will no longer be eligible for staking rewards. In other words, ownership of (w)stBFC is a key factor in determining whether or not you are a staking participant.

stBFC

stBFC is a rebasing token that earns interest in a way that increases in quantity over time, which means that the stBFC you own will automatically increase in quantity based on your staking rewards. As a result, the exchange ratio between stBFC and BFC remains 1:1.

wstBFC

wstBFC is a reward-bearing token that accrues interest in a way that increases the value of wstBFC relative to BFC over time, which means that the amount of wstBFC you own does not change, but the amount of BFC you can exchange for 1 wstBFC automatically increases based on your staking rewards.

stBFC vs wstBFC

The main difference between stBFC and wstBFC is how interest is reflected. For example, let's compare two scenarios where you stake 100 BFC with an annualized return of 10% and are given 100 stBFC and 100 wstBFC. If you are given 100 stBFC, after one year, the amount of stBFC you own will increase to 110 stBFC. On the other hand, if you were given 100 wstBFC, your quantity remains the same at 100 wstBFC, but the amount of BFC you can exchange for 1 wstBFC increases by 10%. In both cases, you will end up with 110 BFC to withdraw after one year.

As you can see above, stBFC and wstBFC have different properties, which makes them suitable for different DeFi services. First, stBFC can be useful in DeFi where the growth of quantity is directly impacted. For example, services that support Yield Farming, where interest and principal are traded or managed separately, may be better suited for stBFC. On the other hand, wstBFC can be conveniently utilized in DeFi services where a fixed quantity of tokens is important. For example, when using wstBFC as collateral in a lending protocol, the landing protocol does not need to account for token quantity fluctuations because the token quantity is fixed.

Can I exchange stBFC and wstBFC?

Biquid offers the facility to exchange stBFC and wstBFC for free through wrapping and unwrapping. For more information, please refer to Wrap!

Delegating to a Validator

Staked BFC are delegated to the best validator in terms of profitability and reliability, who then uses them to enhance the security of the Bifrost network. Validators validate transactions and create new blocks according to the rules of the network. In the process, rewards are distributed to both validators and delegators.

Unstake and withdraw

Unstaking is the process of unlocking staked BFC to be used again. Users can request unstaking using stBFC or wstBFC, and their BFC will be withdrawable after the unstaking period.

When a user requests unstaking, the stBFC used for the request is burned and a Withdrawal NFT is issued with information such as the date and quantity of the unstaking request. After the unstaking period, the user can then request a withdrawal of BFC via the Withdrawal NFT, and BFC will be withdrawn based on the information in the NFT. Once the withdrawal is complete, the Withdrawal NFT is burned.