Bifrost Receives 500,000 DOT Treasury Liquidity Loan from Polkadot

Dedicated liquid staking middleware Bifrost announced on Friday, February 23rd, that it has received a 500,000 DOT treasury loan from Polkadot. 

In a press release shared with Cryptowisser, Bifrost said the one-year loan wa secured following a successful Treasury proposal by the Bifrost Foundation in January. The loan is intended to bolster the growth of vDOT, Bifrost’s liquid staked version of DOT, support the asset’s adoption, utilities and use cases across DeFi dApps within the Polkadot ecosystem, including Substrate and EVM parachains.

Bifrost added that it intends to repay the DOT liquidity loan in full in addition to yield derived from the staking rewards it generates. This arrangement mirrors the successful precedent set by the protocol’s previous two successful 50,000 KSM Treasury liquidity loans from Kusama.

The team added that the proposal submitted to Polkadot last month points out that the minting of vDOT for the Polkadot Treasury represents a strategic diversification approach, effectively putting its DOT capital to productive use over a 1-year period, while ensuring the return of its 500,000 DOT principal with staking rewards.

The loan proposal was approved by a healthy majority, with 98.9% of voters in favor (69.2m DOT) and just 1.1% opposed (748.1k DOT). With the approval, the funds will be disbursed to Bifrost within the next 12 days.

The loan ($3.9 million) represents an important significant milestone for Bifrost which now has over 6.5 million DOT tokens staked on its platform. Thus, making it the most popular liquid staking protocol in the Polkadot ecosystem. 

Bifrost added that the loan approval also showcases the growing sophistication of Polkadot’s decentralized governance platform OpenGov, as well as the usefulness of its canary network Kusama. The network’s OpenGov process, meanwhile, ensures Polkadot community members have a say in how the treasury’s funds are allocated.

Bifrost is a dedicated liquid staking middle layer serving the omni-chain ecosystem. Built on Substrate and powered by Polkadot, it provides standardized cross-chain liquid staking solutions for multiple chains.