BiFi is the Multichain DeFi Project built on BIFROST, the Universal Multichain Middleware. BiFi aims to create a decentralized financial infrastructure that connects all the capital markets currently isolated on each blockchain and creates new products and services that interoperate across multiple blockchains. Through multichain connectivity, BiFi will connect not only Ethereum but also other blockchains like BNB, DOT, KLAY, and ultimately BTC thereby expanding the DeFi ecosystem currently limited to Ethereum.
Bifrost is a multichain middleware platform that enables developers to create Decentralized Applications (DApps) on top of multiple protocols. Bifrost is not restrained to a single blockchain and creates a new environment where developers can combine the best protocols. Developers are able to use Bifrost to develop a substantially more scalable and flexible DApp by selecting the target blockchain on Bifrost.
BiFi enables multichain capability in decentralized finance. BiFi initially offers decentralized lending and staking protocols on Ethereum and Binance Smart Chain (BSC). To expand the DeFi ecosystem, BiFi will connect more chains to create a greater, connected financial ecosystem with the underlying multichain middleware, BIFROST. BIFROST will develop into a DeFi suite and help blockchains expand into a multichain DeFi infrastructure.
BiFi currently supports three services: Lending, Pooling, and Staking.
Lending service is an asset deposit and loan service supported by Ethereum and BSC. Users receive interest by depositing assets registered in the Lending service and can borrow other cryptocurrencies as collateral for the deposited assets to take various financial positions.
Lending is a lending and borrowing service supported on Ethereum and Binance Smart Chain (BSC). Users can deposit assets to earn interest. Once users deposit their assets, they can use their deposits as collateral to borrow another asset and take a position.
Pooling rewards users who provide liquidity (supply) to BFC-ETH and BiFi-ETH pool on Uniswap with BiFi tokens.
- 1.Deposit into the BFC-ETH and BiFi-ETH pool on Uniswap to receive LP (Liquidity Pool) tokens in return.
- 3.Accrue interest from Uniswap and BiFi tokens as rewards!
Staking rewards users who buy and deposit BFC on BiFi with BiFi tokens.
Powering the multichain DeFi can be seen in two vectors: expansion of services and enhancement of capability. BiFi will expand its services by supporting more assets with stable liquidity and market demand. At the same time, it will enhance the capability of blockchains by overcoming the limits of a single blockchain like Ethereum, such as its high gas fees and low transaction throughput.
BiFi leverages Bifrost to enable multichain capability and ensure its security. To create not only a scalable but also a secure multichain platform, Bifrost implements multiple layers of solutions, offering proprietary message relay and monitoring systems, while incorporating verification processes and third-party interoperability solutions.
BiFi is currently supported on Ethereum and Binance Smart Chain (BSC). BiFi on Ethereum and BSC is a single service, not living on a separate island. BiFi uses Bifrost’s multichain technology to collect and exchange data among different blockchains, enabling a truly multichain ecosystem. This ensures that the rewards are not divided chain by chain, but rather shares the same existing distribution model among chains. BiFi will gradually expand the range of information exchanged on these chains to build a multichain DeFi with collateralized loans from different chains.
Interest rates for deposited and borrowed assets are determined algorithmically by the supply and demand for each asset. Interest is calculated and compounded on each block. Interest is added or to the principals, every time a new withdrawal, loan, and repayment occurs. The interest rate model and smart contract code have been developed to optimize gas fees.
When the amount of the loaned asset exceeds the collateral ratio of the deposited asset, liquidation occurs automatically. Liquidation can also occur in the following cases:
- Increase in the price of the asset borrowed as collateral
- Decrease in the price of the asset deposited
- When the value of deposit amount with interest becomes smaller than the value of borrowed amount with interest
A financial service must execute a liquidation process when the value of borrowed amount with interest equals the value of collateral with interest.
A decentralized financial service cannot execute liquidation by itself. Instead, it creates an economic system that incentivizes the liquidators to quickly repay the outstanding loan and protect the protocol. The average liquidation profit of a typical DeFi ranges from 8 to 15%. This range increases the liquidation risk for the initial borrower. BiFi offers a low liquidation profit of 5%, lowering the risk of liquidation for borrowers with the lowest rate in the market.
The collateral ratio of each asset represents the portion that can be used as collateral for loans. This may change based on market conditions.
Collateral ratio = 75%: When you deposit 1 ETH, you can borrow as much as 0.75 ETH.
BiFi is the currency of BiFi platform. BiFi tokens are rewarded to users to use Lending, Pooling, and Staking services, and they become stakeholders of the protocol.
BiFi tokens can be used in the following ways:
- Pay BiFi for using multichain DeFi services
- Stake and participate in BiFi’s governance system
The Bifrost team has always put security at the forefront of our development process. With countless breaches threatening the reputation and stability of the blockchain industry, we believe one of the most important contributions that we can make to the ecosystem as a whole is with a relentless focus on security.